At first glance, short term contracts for I.T. services seem like a great deal. They tend to cost less, and there’s no commitment involved. Safe, easy, and inexpensive, right?
Wrong.
Short term contracts come with a lot of problems that prevent you from getting the best I.T. services, create risks for your business, and keep you from realizing your potential business success. The hidden costs of inadequate I.T. quickly outstrip any savings you might have gotten on the front end. Before you know it, your business is failing, and you’re wondering why.
Here are some factors to consider before you go for a short-term solution to your I.T. needs.
Short Term Contracts Focus on Problems, Not Prevention
When you choose a short-term contract with a managed services provider, they spend all their time chasing problems. They want to find and fix problems, so they can look like they’re doing something important for you. This, of course, means that a lot of tech issues are constantly arising.
Take Martin, for example. He learned this lesson the hard way. As the CEO of a medium-sized trucking company, he wanted to make sure his I.T. needs were managed as inexpensively as possible. He decided that a short-term I.T. contract would do just that.
However, he noticed that one day the company’s server went down, then the next day there was a security breach, and a week later his fleet management software failed because it hadn’t been updated.
Every day there was another problem with the technology he relied on. Although his I.T. guy fixed every issue after it happened, he couldn’t erase the damage those problems caused to the company’s finances and reputation while everything was in chaos.
Contrast that situation with what happens when you have a long-term contract. The MSP takes care of any existing problems right away, but they don’t stop there. They dig deeper to find the I.T. issues in your system that may become devastating problems later on. They take a proactive approach to all your I.T. needs, dealing with potential breakdowns, inefficiencies, and risks before they happen. Instead of being in a perpetual state of crisis, your technology runs smoothly every day.
No Commitment on Your Side Means No Commitment on Theirs
So, you don’t want to commit to a long-term contract? Are you sure? Just be aware that if you go that route, you’re going to be working with a tech services company that makes no commitment to you. Here’s how that can affect your business.
Staffing Issues
No commitment means the I.T. provider doesn’t tailor their staffing to meet your needs. After all, you’re on monthly. They don’t know if you’ll be around in 30 days or not. So, they can’t hire the people that are best suited to meeting the specific needs of your unique business.
Suppose you’re in the banking business, and the I.T. company doesn’t have experts in compliance management. This is a critical issue for you, but your I.T. services don’t adequately address these needs. You get audited, and you’re completely unprepared. So, your bank fails the audit in a big way. Now, you pay a hefty fine, lose the trust of your account holders, and face the possibility of lawsuits. Was it worth it?
It’s different if you have a long-term contract with an MSP. They work with you to identify your current and upcoming needs. Then, if they don’t have the staff they’ll need to take care of you, they can hire and train them. They’re able to do that because they know that the new staff’s expertise will be put to good use as they take care of your specific needs.
What about Research and Development?
Technology is constantly changing. Software, security, and hardware continue to evolve. The thing is, your MSP needs to keep up with the shifts that are happening in information technology. Not only do they need to conduct research and development in a general way. They also need to do R&D that applies specifically to their long-term clients.
So, what happens if there’s no R&D? The MSP won’t have the resources needed as the months go by. They won’t know what experts to bring on board for the new systems and software. And they won’t know how to train them. They won’t know the best I.T. solutions to recommend for your business. They might not even have the equipment they need to manage your new I.T. successfully.
By choosing a long-term contract, you make it possible for the MSP to engage in research and development for their own business. That impacts your business dramatically. It gives you the information you need to make forward-thinking choices. It also ensures you have the technology resources you need to thrive every step of the way as technology continues to change.
Lower Cost Comes with Reduced Scope of Service
You’ve probably heard it all your life: you get what you pay for. That’s especially true when it comes to I.T. services. If you pay less, the I.T. company you’re dealing with has to find a way for that to make financial sense for them. How do they do it? It’s simple. They spend less time doing work for you. They expend fewer resources on your I.T. projects. In short, they give you less.
Your Employees Suffer, and So Do You
When you’re getting inadequate I.T. services, things don’t go well for your employees. They have to deal with technology issues rather spending their time doing the work that’s important to you and them. And, that means their productivity is drastically reduced.
Employee engagement goes down, too, as your employees no longer feel compelled to be a part of what has become a bad situation. Finally, they start leaving, not wanting to go down with your ship.
But if you give your employees great I.T. to use in their jobs, they thrive. They enjoy the satisfaction of doing their jobs well. They feel less stressed and frustrated, which improves their physical and mental health. That means fewer absences. And, they see that your business is on a better track to success. Now, they’re ready to stay. You spend less time and resources hiring and training new staff. It’s a win-win for everyone.
Inadequate I.T. Leads to Unnecessary Risks
If your technology isn’t sufficient, things fall through the cracks. No one addresses the holes in your security. That makes it easy for a hacker to come in and gain access to your data or take over your computers to scam others. If that happens, it can bring both financial risks and reputation risks.
Finally, without anyone overseeing the way your technology contributes to compliance issues, you can face fines or even have to close your doors.
When you pay for a long-term contract, you always have someone on your side, helping you avoid these risks. They make sure your systems are in good enough shape to dramatically reduce security risks. They help you with compliance management. They assist you with your customer portal, so your customers can get the service they need when they need it.
And, since your security is in great shape, you avoid the risk of losing your clients data or letting it get into the wrong hands. Your reputation and your profits are protected.
Inadequate Planning
The longer your MSP knows and works with you, the more they know about what you need. Going month-to-month means your MSP doesn’t know who you are or what your business is about. So, they don’t know how to help you prepare for tomorrow or further down the road.
Poor Practical Planning
A month-to-month contract almost certainly means that no one will be taking care of your practical needs beyond today’s crisis. So, no one updates your hardware until it’s no longer working correctly. No one pays attention to when you need to change out old equipment. Every time an old piece of equipment stops working, you’re hit with an unexpected technology bill.
On a long-term contract, your MSP watches for potential issues and helps you prepare for them. They identify failing or faulty equipment. They let you know what to expect and when you’ll need to replace hardware. They take care of updates automatically, so you never even have to worry about it.
Strategic Failures
The companies that stay on top of what’s happening in their industry are the ones that come out ahead. A part of keeping up with your industry is understanding how people in your business can use technology to get the job done efficiently and profitably. Without a long-term contract for I.T. services, chances are you won’t know how to do that until most other companies have already implemented the needed changes.
With a long-term contract, you can get ahead of the pack. Your MSP knows your goals. They know about your company’s initiatives for growth and sales. They know if you’re looking to expand into new locations. And, they’re committed to helping you get where you want to go by having the right technology solutions in place when the time comes.
An Unstable MSP Is Bad News for Your Business
An I.T. company that relies on month-to-month contracts is going to be less profitable. But why would you care about that? You need to care about it if you want your technology to help propel you to greater success.
Statistics show that I.T. companies that don’t have long-term contracts are far more likely to go out of business than those that do. It’s just too hard to be profitable when customers are constantly coming and going. They have to spend an inordinate amount of time, energy, and money acquiring new customers.
Their business may fold, or they may downsize to the point that they can’t even fix problems when they arise. Or, they may have a lot of turnover, causing you to deal with I.T. people who you don’t know and who may not know their jobs very well.
Then, when you need them, they won’t be there to help you. What helps you meet your business objectives is having a stable MSP that you can rely on in the long run. Then, you don’t need to spend a lot of time finding a new I.T. provider every time the old one goes out of business.
Plus, if they’re stable and profitable, they can afford to invest in research and development to ensure you have what you need in the future. They can put resources toward providing training for their employees, helping them get higher certifications, and getting them ready to deal with the new technologies that are going to change the I.T. environment in your industry.
Where’s Your ROI?
The usual length of contracts in the I.T. industry is three years. That may sound like a big investment.
The truth is that you’re making an investment whether you choose a monthly contract or a long-term contract. If you choose to go month-to-month, you’re taking the risk that that company will provide the I.T. services you need to protect your data, your reputation, and your financial solvency.
As a businessperson, you’re likely aware that investments are usually necessary if you want to get ahead. What’s most important is that your company receives a good return on that investment.
When you have a long-term contract with an MSP, your ROI is going to increase. Here’s how:
A long-term I.T. contract can help you take your business to the next level of prosperity. Consult with a JMARK team member today to find out how a longer contract will benefit you. You can call us at 844-44-JMARK, email us at [email protected], or use our Contact Us page to send a message. JMARK’s team of I.T. experts is headquartered in Springfield, Missouri, with locations in Missouri, Oklahoma, and Arkansas to provide the help you need now and, in the months, and years ahead.
