Helping an IT Managed Services Customer Save over $100K per Year



How would you like to slash $100k off your IT bill over the next 12 months?

This is exactly what we did for one of our clients. We did it by bringing structure to how IT was managed in the company, and we made sure they were getting value from their IT managed services provider. Avoiding costly mistakes with expert advice was another big factor.

Below we’ll explain how, with actual numbers to show the more than $100k saving over a single year.

The Problem

In the company we were helping, IT management, budgeting, and project planning were chaotic, mostly because the company's IT managed services provider (MSP) was lacking in several areas.

This meant there wasn't one problem but many.

  • The company didn't fully understand the services that the MSP offered and which of those services they needed the most.
  • The executive director was flooded with questions on IT-related issues that he didn't have the time to answer. Even if he did have the time, he didn't know the answers to many of them.
  • Projects were discussed and agreed upon but were not then initiated.
  • There were communication gaps with their MSP.
  •  Projects were too costly, so they were not delivering value for money.
  • IT budgets and strategies were not aligned with business objectives.
  • Application and platform licensing was not optimized, and the company was paying for applications that nobody was using.

To exacerbate the situation, there was a change in staff at the company, where the person who was the main point of contact for the MSP left.

The responsibility for liaising with the MSP then fell to another member of staff who had limited technical knowledge plus a range of other non-IT responsibilities putting pressure on their time.

The Solution

The problems with IT management, budgeting, and planning were significant at the company, and they were costly.

The solution, however, was surprisingly simple. The company needed two main things to get its relationship with its MSP back on track and to get control over its IT infrastructure, planning, and spending:

Impartial expertise

The company’s senior management needed impartial advice on what was best for their business. 

Not advice on the easiest approach for the MSP or the cheapest option, but advice on what to do and how to do it properly.

Structured approach 

A structure was needed for the management of the MSP and the wider IT landscape in the company. 

This included things like measuring return on investment and improving communication with the MSP. The first thing we did was get an understanding of the business, how its IT was currently being managed, and the problems that exist.

We had weekly meetings with the senior leadership and with the person responsible for communication with the MSP. We also spoke to all other stakeholders to get a complete picture. From there, we are able to tailor our advice and support to help get the company back on track with its IT management and the relationship it has with its MSP. 

Specific examples of how we did this include:

  • We helped improve communication to help the MSP better understand the company's business and IT requirements and to help the company better understand how the MSP could add value to its operations. This improved communication also delivered efficiency savings.
  • We assessed the contract the company had with its MSP and identified improvements that could be made – improvements that enhanced the service they received while also reducing costs. This was possible as the new contract is more tailored to the customer's requirements.
  • Our team assessed the projects and initiatives that were in a state of suspended animation. Those that added value or were deemed essential (such as upgrades) were completed efficiently and effectively.
  • After getting a full understanding of the IT landscape in the company, we worked with the senior leadership team to break down silos and improve collaborative work. This included things as simple as getting different departments and business units to use the same apps, rather than everyone using something different.
  • Helping the company, including its senior leaders, understand the importance of IT and the value it offers to the business. This changed perspectives in the company from viewing IT as a cost to viewing it as an investment.

The Impact

One of the main impacts was a cost-saving calculated by the company to be over $100k a year. 

Here's how the numbers stack up:

$19k in staffing costs

The person responsible for being the main contact with the MSP used to spend 33 percent of their time on IT issues. 

This has been reduced to five percent, giving them more time to get on with other essential tasks.

$60k in project costs 

When we started working with the company, it was about to embark on a project that would cost in the region of $75k and wouldn't solve the problem they wanted to resolve. 

This project was scrapped, and we implemented a solution that delivered on their requirements at a cost of less than $15k, representing a saving of $60k.

$36K in IT budgeting costs

We took over IT budgeting from an outsourced CFO, saving the company $3k per month.

Some of the cost savings are one-offs while others are ongoing. Cost-savings were not the only long-term benefit of our work with the company, however, as their IT management processes are more efficient.


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About The Author

President of NSI, Tom has been helping small and medium businesses succeed in Connecticut for over 25 years.