When you hire someone to outsource a task – whether it’s plumbing, contracting, accounting or IT – you have an option of time-based billing or managed services. The traditional approach, time-based billing, is to bill for services rendered is based strictly on time consumed.
A contractor who spends 20 hours building a wall is going to charge you for 20 hours of labor.
An accountant who spends six hours reconciling your books and running payroll is going to bill you for six hours of labor.
And of course in IT – if it takes 10 hours to recover from a virus attack the IT firm will bill you for ten hours of labor (even if that’s higher than the cost of the computer itself!)
But MANAGED SERVICES provides a service that is guaranteed to perform at a certain level at a fixed cost, regardless of the amount of time it takes to perform this service.
An accountant could charge a flat fee of $500/mo to balance books, pay bills, and handle payroll and taxes regardless of what pops up during that month.
The advantage of Managed Services is that you know exactly what something will cost and you don’t have to deal with any problems that may crop up yourself. If the service isn’t right, the provider will fix it until it is – even if it incurs additional labor costs on the provider.
Managed Services providers deliver services more efficiently and correctly the first time around compared to their legacy Time-based billing counterparts. And true managed services never incur unexpected cost overruns. The price stays the same, regardless of any unexpected variables that might pop up in the process.
We’ll cover specific IT services that can run as managed services soon.