Analysing Price versus Value When Choosing an IT Service Provider

Price vs Value when choosing a service provider

Technology can be complex. Quite often businesses can be in the position where they know that there are opportunities, challenges or exposures with their IT, but when they start to look around at the available options, it can all seem so difficult. So how do you successfully choose an IT service provider? 

When evaluating an IT partner it can be easy to focus on the technology, basing your decision on what they can do for you and how much it costs 

It's good to keep in mind though, that the how can make all the difference. How does your IT partner go about the business of delivering value for your staff and customers? After all, great business relationships are built on a series of successful outcomes.  

When we are considering choosing any type of service provider, often the first place we focus our our attention is the price tag.  

Why do most people consider Price first? 

  1. MoneyIt’s like a universal scorecard. We all carry dollars around in our wallet and on our cards and it’s at the heart of most things we do in business and in our personal lives so, of all the things that go into a decision we make, money is usually the easiest to understand. As consumers, we all understand the value of money and can confidently make a quick assessment based on dollars when comparing all the available options. 

  2. Prices. They are pretty easy to compare – at least in theory. Once we see a number, we are already mentally doing the sums, comparing it with the value on the page and deciding whether the investment is worth it. Unfortunately, sometimes we can get this calculation wrong, simply because we aren’t always making an informed comparison (you know the 'apples and oranges' concept...). 

  3. Budgets. We only have a certain amount of resources available. As well as money, no one has an inexhaustible supply of time so investing too much time, energy or funds into something that isn’t right just doesn’t make sense. 

Now let’s talk about Value 

As we think about how to understand what value our chosen service provider can bring, let’s take an example nearly every business would be familiar with – hiring an accountant to manage and file your tax return. Let’s say that your accountant is charging $2000 each year. Such a fee is relatively common part of business and there are few businesses that would quibble over it. 

Why is that? Well, it’s simple really. For your $2000 investment, you would expect to receive a nice healthy tax return that is hopefully in excess of the funds invested. And while that is great to measure in dollars, you also have the peace of mind knowing that your taxes will be filed with the correct paperwork, on time and to standard.

Peace of mind. Now it doesn’t matter who you are, peace of mind is valuable. Everyone’s a winner! 

So what does this all have to do with my IT? 

Organisations are increasingly turning to Managed Service Providers to handle elements of their IT requirements. Managed Service Providers are very different from the traditional Break Fix IT Support Model, which works on a time-and-material basis (whereby customers are billed for time spent fixing the problem plus the cost of parts). While the break/fix service is reactive in nature, Managed Service Providers work proactively on the prevention of any potential business operation disruption, as well as assist businesses in leveraging technology and processes to do their best work.  

Broadly speaking, there are two different types of Managed Service models. They can be differentiated through the value proposition offered - either a Cost-Cutting model or a Value-Added model.  

The traditional Cost-Cutting model focuses more on the provision of a management service that concentrates on desktop support and managing and monitoring network infrastructure. This model allows companies access to skills they don’t have internally, generally for a lower cost than an organisation would be able to hire and support the equivalent capability in-house. 

On the other hand, the Valued-Added model provides a broad range of IT solutions and assumes far greater scope of IT functions. Managed Service Providers using this model offer a flexible solution of bundled capabilities tailored for their client. It should be noted that a Managed Service Provider does not necessarily have to replace an organisation's IT department. By partnering with MSPs, internal IT staff can be freed up to focus more on highly strategic projects.

Ideally, what you should be looking for is a Managed Service Provider that delivers the happy duo of saving time and money as well as delivering specialist knowledge that gives your business a competitive advantage.  

Quote from Price vs Value

It makes good sense to engage with professionals that are specialised in their field, like your accountant. In the case of your IT partner, we know that it's important to proactively maintain and monitor our business IT systems to avoid costly downtime and protect valuable company data from loss when disaster strikes. The real value of having a quality MSP in your corner, however, is in the conversations that you have on a regular basis. 

The difference between a good IT partner and a great IT Partner is not that much different to the difference between a good accountant and an awesome one.  

A good accountant gets your books done efficiently, freeing you up to focus on the areas of your business you are passionate about. A GREAT accountant not only gives you more hours in the day to kick goals, but they are together on the journey with you. They know how you operate and bring an appreciation for your goals, along with an up to the minute understanding of taxation rules (and other specialist knowledge) to get you returns that you may not have even thought possible. Next level accountants also bring to the table opportunities aligned with your business goals that are often invisible to those not working in your particular space. It’s what most businesses expect when we choose an accountant.  

Shouldn’t your IT partner be the same?  

Technology moves at a blistering pace. Having a trusted IT partner on your team to not only help manage the technology budget and reduce the risks of downtime, but also to share valuable insights into the latest advances in technology and create competitive advantages for your business is really where excellence is at.  

When is the last time you had a good conversation with your technology provider? 

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Picture of Gary Titmarsh

Gary is the Client Success Manager at Grassroots IT. He has worked in the IT industry for almost 20 years, in a variety of roles from systems engineer and project manager through to account manager. After gaining vast experience in global organisation IBM, Gary is Six Sigma Green Belt certified and skilled in a variety of Project Management Methodologies including Prince2 and IBM WWPMM. He is fluent in Japanese and enjoys spending time with family in Japan, participating in festivals and playing the Japanese Taiko.

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