Managed Services vs. Time and Materials work … Which Is Better?

There is no right or wrong answer to this question! The clients needs have to be looked at and a solution crafted that is both comfortable and serves them in the best possible way!

Service Client on the Mechanism of Metal Cogwheels.

© tashatuvango – Fotolia

First off maybe we should lay out some definitions :

Managed Services : This could include all onsite and remote tech support and maintenance tasks needed, all taken care of for one monthly price.

Time and Materials : There is no set monthly bill and work is simply performed on an “as needed” basis and billed as time and/or materials are incurred.

To determine the best possible answer for a client there are a couple of questions that need to be answered first :

#1 : Do they have anyone onsite already that is willing and/or able to do some tasks themselves?

#2 : What is the agreed upon list of tasks/items that the IT Service will be responsible for in the customer environment?

Hurdle #1 : How much time do we anticipate it will take each month for the IT Service provider to perform these tasks each month and thus what would cost be charged by the hour?

This is achieved by adding up all the tasks that are needed to be done and the time needed for each and coming up with a total amount of time.

Hurdle #2 : Does the IT Service Provider have any tools available to them that could automate any of the tasks listed in Hurdle #1?

Automated tasks can often be done after hours and in parallel (all at the same time) thus dropping the total amount of time needed to accomplish the tasks and also the amount of disruption to the business environment.

Hurdle #3 : Does the customer have the budget to a regular monthly payment for maintenance/support services?

Some clients may be really small and/or just may not have the cashflow to support committing to a regular payment or any sort.

Once you armed with the answers to 2 questions above and have jumped the 3 hurdles then you pretty much have all the information you need to determine the best course of action for the customer …

Scenario #1 : The customer already has an onsite IT Support person and they simply need you as backup in case something comes up that the onsite person can’t handle. In this case there really is no basis for a managed services agreement … you just bill them when they call you and you’re done!

Scenario #2 : The customer already has an onsite IT Support person but that person is overwhelmed with break/fix requests from the onsite staff as is not able to keep up with the regular preventative maintenance tasks that are needed to keep desktops/servers secure and in good shape. In this case the IT Service can use automated tools to ensure these tasks are done on a regular basis and can be reported on and can do it for much less cost than someone doing it manually. In this case perhaps a managed services agreement can be set up to take care of the automated tasks and then perhaps just have a break/fix agreement in place for when the IT Service provider is required to come onsite and help out.

Scenario #3 : The customer has no onsite IT Person at all and the customer is not able to keep up with the regular preventative maintenance tasks that are needed to keep desktops/servers secure and in good shape. In this case the IT Service can use automated tools to ensure these tasks are done on a regular basis and can be reported on and can do it for much less cost than someone doing it manually. In this case perhaps a managed services agreement can be set up to take care of the automated tasks and any support requests that can be taken care of remotely then perhaps just have a break/fix agreement in place for when the IT Service provider is required to come onsite physically intervene.

Scenario #4 : The customer has no onsite IT Person at all and the customer is not able to keep up with the regular preventative maintenance tasks that are needed to keep desktops/servers secure and in good shape. To ensure cost certainty the customer has also requested a fixed monthly cost for everything whether it’s automated maintenance, remote support or onsite visits. In this case the IT Service can set up a managed services agreement that encompasses it all and the client just has one flat rate for everything.

Now … no 2 scenarios are the same and there are many more I could come up with but you get the picture!

A good IT Service provider will take the time to talk with the client and listen to their needs and desires and abilities and craft a solution that creates a win-win situation …

I’d really love to hear your opinion! If you have any questions or comments please reach out using one of the methods on our CONTACT page and I’ll forward to hearing from you! 

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