How to choose between a Managed IT Model and a Break and Fix Model

• The Break and Fix customer workflow
• Customer issues
• How we intervened
• Customer workflow in the Managed IT Model
• Cost comparison between the two models

Customer case study

To preserve our client's anonymity, we'll call him Justin. He is the CFO at the fictional transportation company Transport ABC Inc. They have 25 internal employees who have a workstation. 

Justin didn't join the Transport ABC Inc. team with an IT assignment, but being the most comfortable in the field, he often juggles his job responsibilities with IT tasks. When an IT problem arises, his coworkers usually ask him if he can take care of it. 

Generally, Justin is able to help his colleagues with minor problems such as reboots, password resets and hardware purchases. However, he needs assistance with everything from e-mail archives and file servers to WiFi interruption and the creation of access for new employees. It goes without saying that in the event of a security problem, he would also be ill-equipped to deal with it.

In such situations, Justin hires the company's IT provider and pays for the hours needed to solve the problem.

So here's what the workflow looks like in their current "Break and Fix" model. 

1. When a problem arises, employees bring it to Justin
2. If Justin can fix it, he does
   
   1. Once resolved, he checks with the employee to see if everything is working on their end
      
      1. If so, he closes the ticket
      2. If not, he works on the problem until it's resolved
3. If Justin can't fix it, he contacts the IT supplier
   
   1. Once resolved, he checks with the employee to see if everything is working on their end
      
      1. If so, he closes the ticket
      2. If not, he works on the problem until it's resolved

The challenges

Justin asked us to look at some of the challenges they were facing. The first thing he wanted us to address was to restructure the process for better cost management. As CFO, he was finding it difficult to get a clear picture of annual IT spending, as additional costs were regularly added to the total at month-end. Even including a monthly safety margin, they continued to exceed the target.

Next, he stressed the need to find ways of reducing IT security risks. He recognized that the company had not made investments to ensure its ability to remain resilient in the event of a cyber-attack or data breach, despite the fact that the growing threat of hackers was a pressing challenge to be addressed. At this stage, a contingency plan was considered absolutely essential.

Finally, as mentioned earlier, Justin is not an IT Director, but a CFO. Although he is competent in IT, this is not the role for which he was hired. He spends at least five hours a week solving IT problems for the whole organization, which means he has five hours less to spend on his own tasks. The consequences go beyond what one might imagine. A delay in a project or in the settlement of payments can result in additional costs. What's more, it can generate additional stress (and as we know, stress isn't limited to office hours - it often works overtime!).

So how much does it cost to follow a "break and fix" model?

It all depends! Some costs can be anticipated, such as license fees and backup costs. In addition, Transport ABC Inc. had also set up a buffer budget for hardware, in case they needed to replace a laptop or acquire other equipment. So their annual costs looked like this: 

• Microsoft Business Premium licenses x 25 users = $8,940
• Firewall license x 1 = $1,500
• Veeam backups x 1 = $6,000
• Hardware = $12,000

So that's a total of about $28,440 that was budgeted for the year. But is that what was actually spent? Surely you can guessed the answer: no. 

Over the course of the year we reviewed, several unforeseen costs were added to their original budgets. The hours indicated are a rough estimate of the time the IT service provider had to devote to resolving these problems.

• Firewall failure = $600 (approx. 5h)
• No access to file server = $1,500 (approx. 10h)
• Ransomware victim = $10,000 (approx. 40h)
• Intermittent WiFi problems = $600 (approx. 5h + travel)
• Daily technical problems = $6,000 (approx. 50h)

It's also important to note that the IT provider's hourly rate varies according to the type of problem encountered. In the industry, these are called "levels", which determine the degree of severity of the problem (and therefore the level of skill required to solve it). 

Transport ABC Inc. ended up exceeding its initial IT budget by $18,700, bringing the total to $47,140. A pretty hefty sum.

Our intervention

So how did we intervene? 

When we start working with a new customer, our first step is to carry out an audit of their IT infrastructure, followed by a report of recommendations. Often, we're hired to solve a specific problem, but during the audit, we identify issues that should be addressed as a top priority.

Our initial goal was to eliminate Justin's need for filtering through problems, so that all tickets could be opened directly by employees. A process was put in place to remove Justin from the equation. The transition to a managed model was aimed at adopting a proactive approach to all IT activities. In the case of Transport ABC Inc. we took over the management of updates to workstations and servers, as well as data backup. In addition, we handled communications with other suppliers when necessary.

In their case, they were regularly experiencing problems with their WiFi. Initially, they thought it was a problem with their Internet connection, so they spent a lot of time with Bell trying to solve the problem, to no avail. After a visit from their IT service provider (and additional costs, obviously), they realized it was actually a problem with the WiFi modem. This type of interaction is part of our scope of action. No need to waste time on hold with your Internet provider, we take care of understanding the real problem and resolving it quickly, so you can get back to business as soon as possible.

Now, here's what their workflow looks like in the Managed IT Model:

1. When a problem arises, the employee creates a ticket
   
   1. Once resolved, we check with the employee to see if everything is working on their side
      
      1. If so, we close the ticket
      2. If not, we work on the problem until it's resolved

That was pretty easy!

The question on everyone's lips right now, we're sure: how much does it cost to be in a Managed IT Model?

Typically, license costs stay about the same, BUT in the case of Transport ABC Inc. we were able to reorganize their structure, saving them $1,302. 

• Microsoft Business Premium licenses x 25 users = $8,940 $7,638
• Firewall license x 1 = $1,500
• Veeam backups x 1 = $6,000
• Computer hardware = $12,000

By adding our managed service fees (depending on the plan chosen), their total annual IT spend rose to $50,838. It's crucial to note that the price of managed services can vary for each organization, as each one's needs are different. However, they ended up spending $3,698 more by switching from a "Break and Fix" model to a managed model.

Is this a reasonable investment to guarantee the organization's IT security? Is it a reasonable investment to improve overall employee productivity? Is it a reasonable investment to reduce the stress on your resources?
We're convinced it is, but it's our business! It's up to you to ask yourself these questions and determine whether the transition to a managed services model would be beneficial to your organization.

If you'd like to discuss this further, we'd be delighted to meet you!