How can Managed Services reduce your IT costs?

October 31, 2022

Managed services can reduce IT cost by up to 50% or more without a doubt. CompTIA’s survey showed that 33% of companies saved 25-49%, while 13% reported more than 50% savings.

But many Chief Information Officers (CIOs) of small to medium businesses that rely on in-house IT are still wondering how can IT managed services that companies pay monthly can help reduce their IT costs.

We will answer your question in this post if you are one of those CIOs.

What is IT Managed Service?

I will give you a particular scenario. Last year you and your small team in the IT department were busy working on a substantial project.

It involves creating a business application for your franchise company with many stores across Malaysia. This is also your first time deploying such a big-scale application.

Not only your small team is cut in half. Now, the IT personnel have to handle daily IT support for the company and are also involved in maintaining the new system.

For sure, many potential problems will occur in this situation.

Too many service outages and downtime, and your team is not quick enough to handle it

Lost quite a lot of data due to a lack of in-house expertise.

Too many complain about the new business application because they need more support.

The solution? IT managed service is the best choice for sure. Simply put, managed service is designed for you to outsource the management of some section of your IT department’s responsibility.

It could be managing a piece of networking gear, or it could also go to the extent of outsourcing the whole IT department.

All activities and management will be executed under a strict SLA with reporting.

These are the reasons managed service can help reduce IT cost

1 - Scratch off the extra labor cost

It is a challenging task for you as an IT leader to manage all IT operations and infrastructure.

Let alone with projects and company goals that have been passed to you.

There is a time when the company did an excellent job, and you need an extra set of hands to cope with all the tasks that need to be done.

But the extra hands do not always translate to the correct hands.

With the shifting nature of business needs, it’s easy for you to catch up in the overspill of talent in one area and a shortfall in another.

You no longer have to stress balancing the job role and the need to train them when you outsource certain IT functions to Managed Service Provider(MSP).

No bonus and no employee benefits are needed.

Not only can you have significant cost savings, but you can also focus on your current team working on projects that significantly impact the company’s growth.

2. Reduce hardware spending

As an IT leader, you already know that in-house hardware can be expensive.

Every hardware degrades over time.

Eventually, you will spend considerable capital on replacing it with the latest hardware to ensure your system runs in the optimal state.

Not to mention the cost of round-the-clock electricity for power and cooling.

MSP can help you leverage cloud technology to reduce your hardware spending and plan the best cloud strategy that suits your company’s needs.

MSP also can provide you with as-a-Service offering like Backup-as-a-Service(BaaS), Disaster-Recovery-as-a-Service(DRaaS), Security-Operation-Center-as-a-Service(SOCaaS). These offerings help you protect your business without spending extra hardware and maintenance costs.

3. Increase efficiency by streamlining the processes

IT department is one of the crucial parts of the company. Many folks depend on you to keep their computer system running optimally every day.

According to research firm IDC, inefficiency costs companies anywhere from 20% to 30% of their revenue every year,

You must streamline your process to ensure your IT department is highly efficient. But we know it is easier said than done.

Most of the time, IT leaders need help ensuring that the right people are always in the right place at the right time.

It comes with many reasons, such as more critical projects you need to focus on, unnecessary processes creeping in the flow, or the job role imbalance in your hiring.

When you are working with MSP, this problem will be solved with less headache. Not only you got the extra assistance needed during the peak of business, but you also automated the process to the MSP.

You eliminate the bottleneck, and your process becomes much smoother and highly efficient, with less downtime, and the most important thing is cost savings.

4. Improve how you spend your budget

To solve the problem fast and to make your IT department more agile, IT leaders tend to spend more than they need to.

From software licensing, hardware purchase, recruitment, making an Operational Expenditures (OpEx) or Capital Expenditures (CapEx) decision, and many more.

MSP can provide valuable consultation on budgeting and forecasting your IT expenses.

MSP also can assist you in looking closely at your current technologies, systems, and processes to point out weaknesses, redundancy, and inefficiencies.

You will have better insights to plan for changes and make cost-effective decisions for your IT department.

5. Avoid burning money because of a security breach

The security breach is inevitable even in Malaysia. Media Prima Berhad was hit by a ransomware attack that demanded 1,000 Bitcoins (RM27 million) for their email system in early November 2018.

IT leaders can’t stop but worry about potentially major security incidents that can threaten their tenure in the company.

But the reality is you should not worry about the security breach but about how you respond to it.

According to Gartner, IT leaders are often judged on the effectiveness of their incident response than the fact that the breach occurred.

As security becomes your top priority, throwing money at all the latest security trends and following what others are doing is not the correct answer to your problem.

Instead, you can work with MSP to help you coordinate your cybersecurity strategy and plan the most effective incident response and risk management.

Eliminate future risk and save costs by utilizing MSP’s specialized security expertise.

Access the latest technology and updates, allowing for more effective security measures to protect your business data and network.


You can reduce IT costs by yourself without relying on MSP assistance, but it may take a longer time, fields of expertise, and effort to make it successful.  However, with careful planning and prioritization, you can make it possible.

Partnering with a Managed Services Provider can lessen your burden and provide you with a broader field of expertise, reliable support, and managing IT risk aligned with your company’s business and technology goals.

It is crucial for you as an IT leader to carefully consider your current IT department and company’s specific goals and needs to determine the best approach for reducing your IT costs.

AXO Technologies offers customized managed service solutions for small and medium businesses that consider having an organized, efficient, and reliable IT department than what they have right now.  

Let us hear about your current IT state and what is your IT goals. Our consultants are glad to give you free advice on how you can achieve your goals. Contact us now.

AXO Technologies Sdn Bhd (1276407-U) is an innovative and thoughtful IT consulting firm based in Selangor, Malaysia. We help organizations solve their IT challenges by leveraging technology in their business process.

With our certified professional team, we strive to provide a better understanding and relationship with our customers.
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