The Financials of Managed Services

Stay with in-house IT or outsource to an external provider?
Read on to see why you should consider an external provider. Our client had a single senior engineer handling DevOps and Production Ops. There was a maintenance backlog. Production outages kept the engineer busy so development was throttled. The company was contemplating adding another engineer when ProxyIT was introduced. Our challenge was to stabilize IT Operations. Even at a projected staffing cost of more than $300K, cost was the second priority. How were we able to achieve these cost savings for our client? The illustration below tells our story and shows the cost savings that accrued.

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Initially ProxyIT dedicated significant resources to the engagement to bring projects and tasks under control. We used the combined attention of several of our staff; costs increased. But decreasing the maintenance backlog was critical to restoring production availability, and while our initial cost was higher than forecast, the production availability improved almost immediately.
At the 4 month mark the ProxyIT costs approximated the cost of a single senior engineer’s salary.

Once the systems were stable, our project manager took over scheduling of task and project work. This improved the release of new products, further improving stability
At 8 months, our cost dropped below the salary of a senior engineer
Working to standard operating procedures and performing regular maintenance reduced man hours lost to outages and recovery.

At 16 months our cost dropped to less than half the salary of a senior engineer.
The ability to apply man hours only when required (in an increasingly stable environment) allowed us to provide the same service at a much lower cost and quicker responses time than a dedicated internal team could manage.

Can we do this for you? Call and we can discuss it!