The Managed Service Provider and Its Role in America’s Enterprise Level Companies

Skyscraper in PortlandAmerican enterprise-level companies are using MSPs more than ever. An MSP, or managed service provider, is responsible for a pre-determined list of services that would otherwise be carried out in-house. For instance, a certain enterprise might outsource its IT help desk to a more cost-effective, experienced MSP of help desk services. Alternatively, an MSP might manage a company’s use of IT vendors such as SaaS or LaaS providers.

According to a Nimsoft survey of executives and managers at enterprise-level companies, 55 percent of enterprises are currently using at least one managed service provider, while 39 percent are planning to engage an MSP. (Enterprises are defined as companies with 1,000 to 20,000 employees.) This article examines the benefits enterprise-level companies accrue by partnering with a managed service provider.

According to the Nimsoft survey, CIOs typically make the decision to contract with an MSP. Here are some of the reasons the Nimsoft survey participants cited for outsourcing IT management to an MSP.

Save Money

The most popular reason why CIOs and other enterprise leaders choose to work with MSPs is to reduce IT spending. Oftentimes, an MSP can achieve identical or superior results over in-house workers, and for a lower cost. This is because managed service providers are specialists. Like most outsourcing companies, they must become very good at what they do or they risk going out of business.

One tool that many MSPs offer, for instance, is a Vendor Management System or service (VMS) with the goal of creating transparency around in-house IT costs and outside vendor expenses. A VMS is expensive and difficult to create; although it’s a useful tool, it’s not something most companies would spend time on. In contrast, MSPs earn a competitive advantage by creating VMS systems. By creating a concise management tracking system for clients, a managed service provider can win customer loyalty and new accounts.

This kind of tool can save an enterprise money by revealing wasteful vendor partnerships. This and other MSP contributions can help enterprise-level companies cut costs. For instance, with an MSP’s expertise on their side, many companies find they enjoy more system uptime and increased productivity.

Mitigate Risk

IT is an incredibly complex field these days; it’s nearly impossible for a single individual to monitor all of the vendor relationships, technologies, and software that a certain enterprise uses. Recognizing this, many companies choose to share some of their IT duties with an MSP, who can provide expert advice to minimize the risk of system crashes and other IT hazards.

Access to Experts

Of the executives interviewed in the Nimsoft survey mentioned earlier, 37 percent reported having contracted with an MSP for their “improved technical experience/depth.” Typically, a managed service provider is extremely knowledgeable about IT. Indeed, because MSP representatives have experience working with multiple clients across different industries, they can typically offer well-rounded, cutting-edge solutions to IT problems.

Round-the-Clock Support, Anywhere on Earth

The internet has removed many of the time-based barriers that limited business in the past. A few decades ago, business could only be conducted during typical business hours. Now, however, many enterprises operate on a 24/7 basis. Their clients and customers expect near-continual support, regardless of the hour. Of the executives interviewed in the Nimsoft survey, 22 percent reported hiring an MSP for “better coverage for off-hours.” It’s not unusual for a managed service provider to offer support at all hours of the day and night.

Free up Internal Resources

According to the Nimsoft executive survey, 36 percent of executives choose to partner with an MSP in order to “improve focus on core business” services. This is one of the most popular reasons for outsourcing across industries. By offloading certain time-consuming aspects of doing business to an MSP, business leaders and employees can pay more attention to the heart of their business. For instance, an enterprise that produces healthy to-go snacks could spend more time on product taste by entrusting their server maintenance to a managed service provider.

Working with MSPs brings American enterprises many benefits, including lowered costs, decreased risk, enhanced access to expert knowledge, 24/7 support, and increased internal resources. For these and other reasons, managed service providers are popular among Fortune 500 companies, and more and more government departments are transitioning to MSP-supported operations.

[ Photo by: Derrick Coetzee, on Flickr, via CC License ]

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