Managed IT Services - The Complete Picture

Before you can accurately compare the fees, services, and deliverables of one managed service provider (MSP) with another, you have to understand the three predominant service models of most of these types of companies.

If you make it to the end of this artcile, I guarantee that you will have a much clearer understanding of Managed IT Services and how it could be applied to your business. My intention here is to provide you with a complete picture so you can make the most informed decision possible.

Craig Reynolds

Managing Director, Tech Precision Pty Ltd

If you are the owner of a business in Melbourne that is currently looking to outsource some or all of the managed services for your company, this report contains important information that will be extremely valuable to you as you search for a competent partner operating in Melbourne you can trust.

My name is Craig Reynolds, MD of Tech Precision Pty Ltd. We have been providing IT managed services to businesses in the Melbourne area for over 30 years.

One of the most common questions we get from new prospective clients is “What do you guys charge for your managed services?”

Since this is such a common question – and a very important one to address – I decided to write this report for three reasons:

  • I wanted an easy way to answer this question and educate all prospective clients who come to us on the most common ways IT service companies’ package and price their managed services, and the pros and cons of each approach.
  • I would like to shine a light on a few “industry secrets” about IT service contracts and the levels of service you should expect that almost no business owner thinks about, understands or knows to ask about when evaluating IT service providers that can end up burning you with hidden fees and locking you into a long-term contract when they are unwilling or unable to deliver the quality of service you need.
  • My goal is to educate business owners on what to consider and what to ask prospective IT service partners to help them pick the right managed services provider for their specific situation, budget and needs based on the VALUE the company can deliver to them, not just the price, high OR low.

In the end, my purpose is to help you make the most informed decision possible, empowering you to find a managed services partner who helps you solve your problems and accomplish what you want in a time frame, manner and budget that is right for you.

The Predominant Managed IT Services Models Explained.

Before you can accurately compare the fees, services, and deliverables of one managed service provider (MSP) with another, you have to understand the three predominant service models of most of these types of companies. Some companies offer a blend of all three, while others are strict about offering only one plan. The three main service models are:

Time and Materials.

In the industry, we call this “break-fix” services. Essentially you pay an agreed-upon hourly rate for a technician to “fix” your problem when something “breaks.” Under this model, you might be able to negotiate a discount based on buying a block of hours. The scope of work may be simply to resolve a specific problem, like fixing an issue with your e-mail, or it may encompass a large project, like a network upgrade or migration that has a specific outcome and end date specified. Some companies will provide staff augmentation and placement under this model as well.

Managed IT Services.

This is a model where the IT service company takes on the role of your whole IT department, not only installing and supporting all the PC’s, users and devices that connect to and work in your environment, but also offers telephone and on-site support, antivirus, cybersecurity, backup and a myriad of other services to monitor and maintain the health, speed, performance and security of your computer network.

Software Vendor-Supplied IT Services.

Many software companies will offer IT support for their customers in the form of a help desk or remote support for an additional fee. However, these are typically scaled-back services, limited to troubleshooting their specific application and NOT your entire computer network and all the applications and devices connected to it. If your problem resides outside their specific software or the server it’s hosted on, they can’t help you and will often refer you to “your IT department.” While it’s often prudent to buy some level of support package with a critical software application you use to operate your business, this is insufficient to provide the full IT services and support most businesses need to stay up and running.

When looking to outsource your IT support, the two service models you are most likely to end up having to choose between are the “managed IT services” and “break-fix” models. Therefore, let’s dive into the pros and cons of these two options, and then the typical fee structure for both.

Managed IT Services Vs. Break-Fix – Which Is the better, more cost-effective option?

You’ve probably heard the famous Benjamin Franklin quote, “An ounce of prevention is worth a pound of cure.” I couldn’t agree more – and that’s why it’s my sincere belief that some form of managed IT is essential for every business.

In our company, we offer different plans to fit the needs of our clients. Our clients like this as it provides them options able to meet their business and budget needs. We offer a fully managed approach where more comprehensive IT services are covered in a managed plan. By doing this, we can properly staff their accounts and ensure they get the fast, responsive support and expertise they need across Melbourne.

The only time I would recommend a “time and materials” approach is when you already have a competent IT person (or team) proactively managing your computer network and simply have a specific IT project to complete that your current in-house IT team doesn’t have the time or expertise to implement (such as migrating to a cloud-based solution, implementing a cybersecurity plan, etc.).

Outside those scenarios, I do not think the break-fix approach is a good idea for general IT support for one very important reason: you’ll ultimately end up paying for a pound of “cure” for problems that could have easily been avoided with an “ounce” of prevention.

Managed IT Sevices vs Break Fix

Why Regular Monitoring and Maintenance Is Critical For Today’s Computer Networks?

The fact of the matter is computer networks absolutely, positively, need ongoing maintenance and monitoring to stay secure and operational. The ever-increasing dependency we have on IT systems and the data they hold – not to mention the type of data we’re now saving digitally – has given rise to very sophisticated cybercrime organisations that work around the clock to do one thing: hack into your network to steal data or money or to hold you ransom.

As you may know, ransomware is at an all-time high because hackers make millions of tax-free dollars robbing one small business owner at a time. But that’s not their only incentive.

Some will attempt to hack your network to gain access to bank accounts, credit cards or passwords to steal from you (and your clients). Some use your network to send spam using YOUR domain and servers, host pirate software and, of course, spread viruses. Some even do it just for the “fun” of it (I have no words for this).

Network Monitoring

And don’t think for a minute these cybercriminals are solo crooks working alone in a hoodie out of their basement. They are highly organised and well-run operations employing teams of hackers who work together to scam as many people as they can. They use advanced software that scans millions of networks for vulnerabilities and use readily available data on the dark web of YOUR usernames, passwords, e-mail addresses and other data to gain access.

Of course this isn’t the only IT danger you face. Other common “disasters” include disgruntled employees, lost devices, hardware failures (still a BIG reason for data loss), fire and natural disasters and a host of other issues that can interrupt or outright destroy your IT infrastructure and data.

Then there’s regulatory compliance for any business hosting or touching credit card or financial information, medical records and even client contact information, such as e-mail addresses.

Preventing these problems and keeping your systems up and running (which is what managed IT services is all about) is a LOT less expensive and damaging to your organisation than waiting until one of these things happens and then paying for emergency IT services to restore your systems to working order (break-fix).

Should You Hire a Full-Time IT Manager?

In most cases, it is not cost-effective for companies with under 100 employees to hire a full-time IT person for a couple of reasons.

Firstly, no one IT person can know everything there is to know about IT support, cybersecurity and network infrastructure. If your company is big enough and growing fast enough to support a full-time IT lead, you probably need more than one person. You need someone with help-desk expertise as well as a network engineer, a network administrator, a CIO (chief information officer) and a CISO (chief information security officer).

Therefore, even if you hire a full-time IT person, you may still need to supplement their position with co-managed IT support using an IT partner that can fill in the gaps and provide services and expertise they don’t have. This is not a bad plan; what IS a bad plan is hiring one person and expecting them to know it all and do it all.

Second, finding and hiring good people is difficult; finding and hiring skilled IT people is incredibly difficult due to the skill shortage for IT in Melbourne and in fact across the country. Unless you’re quite technical yourself, it’s going to be very difficult for you to interview candidates and sift and sort through all the duds out there to find someone with good skills and experience. Because you’re not technical, you might not know the right questions to ask during the interview process or the skills they need to do the job.

More often than not, the hard and soft costs of building an internal IT department for general IT support simply don’t provide the best return on investment for the average small to midsize business. An internal IT department typically doesn’t make sense until you have closer to 100 employees OR you have unique circumstances and need specialised skills, a developer, etc., but not for day-to-day IT support and maintenance.

Why “Break-Fix” Works in The Consultant’s Favour, Not Yours.

With a “break-fix” model, there is a fundamental conflict of interest between you and your IT partner. The IT partner has no incentive to prevent problems, stabilise your network or resolve problems promptly because they are getting paid by the hour when things stop working; therefore, the risk of unforeseen circumstances, scope creep, learning curve inefficiencies and outright incompetence are all shifted to YOU, the Client. Essentially, the more problems you have, the more they profit, which is precisely what you DON’T want.

Under this model, the IT consultant can take the liberty of assigning a junior (lower-paid) technician to work on your problem – one who may take much longer to resolve an issue that a more senior (and more expensive) technician might resolve in a fraction of the time. There is no incentive to properly manage the time of that technician or their efficiency, and there is every reason for them to prolong the project and locate MORE problems than solutions. Of course, if they’re ethical and want to keep you as a client, they should be doing everything possible to resolve your problems quickly and efficiently; however, that’s akin to putting a Labrador in charge of watching over the ham sandwiches. Not a good idea.

Second, it creates a management problem for you, the customer, who now has to track the hours they’ve worked to make sure you aren’t getting over billed, and since you often have no way of really knowing if they’ve worked the hours they say they have, it creates a situation where you really, truly need to be able to trust they are being 100% ethical and honest AND tracking THEIR hours properly (not all do unfortunately).

And finally, it makes budgeting for IT support related expenses a nightmare since they could vary drastically from one month the next.

What Should You Expect to Pay?

Important! Please note that the following price quotes are industry averages based on a recent IT industry survey conducted of over a number of different IT service companies in Melbourne and around the country. We are providing this information to give you a general idea of what most IT services companies charge and to help you understand the VAST DIFFERENCES in service contracts that you must be aware of before signing on the dotted line. Please understand that this does NOT reflect our pricing model or approach, which is simply to understand exactly what you want to accomplish FIRST and then customise a solution based on your specific needs, budget and situation.

Hourly Break Fix Fees.

Most IT services companies selling break-fix services charge between $120 and $250 per hour with a one-hour minimum. In certain cases, they might give you a discount of 5% to as much as 20% on their hourly rates if you pay for a block of hours in advance.

If they are quoting a project, the fees range widely based on the scope of work outlined. If you are hiring an IT consulting company for a project, I suggest you demand the following:

  • A detailed scope of work that clearly specifies what “success” is. Make sure you detail what your expectations are in performance, workflow, costs, security, access, etc. The more detail you can provide, the better. Detailing expectations up front will help with avoiding miscommunication and additional fees later on to give you what you REALLY wanted.
  • A fixed budget and time frame for completion. Agreeing to this up front aligns both your

agenda and the consultant’s. Be careful of loose estimates that allow the consulting company to bill you for “unforeseen” circumstances. The bottom line is this: Your IT consulting company is responsible for accurately assessing your situation and quoting a project based on their experience. You should not have to pick up the tab for a consultant underestimating a job or for their inefficiencies. A true professional knows how to take those contingencies into consideration and quote accordingly.

Managed IT Services.

Most managed IT service partners will quote you a MONTHLY fee based on the number of devices they need to maintain, backup and support, or the number of users relying on the system. At Tech Precision, that fee is somewhere in the range of $100 to $200 per person.

If you hire an IT consultant and sign up for a managed IT service contract, here are some things that SHOULD be included:

  • Security patches applied weekly, if not daily, for urgent and emerging threats
  • Antivirus updates and monitoring
  • Firewall updates and monitoring
  • Backup monitoring and test restores
  • Spam-filter installation and updates
  • Spyware detection and removal
  • Monitoring disk space on workstations and servers
  • Monitoring hardware for signs of failure
  • Optimising systems for maximum speed and efficiency

The following services may NOT be included and will often be billed separately. This is not necessarily a “scam” or unethical UNLESS the managed IT services company tries to hide these fees when selling you a service agreement. Make sure you review your contract carefully to know all the inclusions and exclusions!

  • Hardware – new servers, PCs, laptops, etc.
  • Software licenses
  • Special projects
  • Professional Services


Warning! Beware the grey areas of “all-inclusive” service contracts. To truly compare the “cost” of one managed IT services contract with another, you need to make sure you fully understand what IS and ISN’T included AND the service level you are signing up for. It’s VERY easy for one IT service provider to appear less expensive than another UNTIL you look closely at what you’re getting.

Ask your IT service provider the following questions to clarify exactly what you’re getting for the money. Some of these items may not be that important to you, while others (like response time, adequate insurance and uptime guarantees) may be critical. Make sure you fully understand each of these items before making a decision about whom the right provider is for you, then make sure you get this IN WRITING.

Questions You Should Ask Your IT Service Company or Consultant Before Hiring Them For IT Support.

Customer Service.

When I have an IT problem, how do I get support?

Our Answer: When a client has a problem, we “open a ticket” in our IT management system, so we can properly assign, track, prioritise, document and resolve client issues. However, some IT companies force you to log in a portal to submit a ticket and won’t allow you to call or e-mail them. This is for THEIR convenience, not yours. Believe me, this will become a giant inconvenience and a thorn in your side. While a portal is a good option, it should never be your ONLY option for requesting support.

Also, make sure they HAVE a reliable system in place to keep track of client “tickets” and requests. If they don’t, I can practically guarantee your requests will sometimes get overlooked, skipped, lost and forgotten.

Requesting support should also be EASY for you. Be sure to ask how you can notify their support desk about a problem for resolution. We make it easy. Calling, e-mailing or submitting a ticket via our portal puts your IT issue on the fast track to getting resolved.

Do you have a feedback system in place for your clients to provide “thumbs up” or “thumbs down” ratings on your service? If so, can I see those reports?

Our Answer: If they don’t have this type of feedback system, they may be hiding their lousy customer service results. If they DO have one, ask to see the actual scores and reporting. That will tell you a lot about the quality of service they are providing. We are very proud of our positive client feedback scores and will be happy to show them to you.

IT Maintenance (Managed Services).

Do you offer true managed IT service and support?

Our Answer: You want to find an IT company that will proactively monitor for problems and perform routine maintenance on your IT systems. If they don’t have the ability to do this, or they don’t offer it, we strongly recommend you look somewhere else. Our remote network monitoring system continually watches over your network, constantly looking for developing problems, security issues and other problems, so we can address them BEFORE they turn into bigger problems.

What is NOT included in your managed services agreement?

Our Answer: Another “gotcha” many I.T. companies fail to explain what is NOT included in your monthly managed services agreement that will trigger an invoice. So-called “all you can eat” options are RARELY true – there are limitations to what’s included, and you want to know what they are BEFORE you sign.

It’s very common for projects to not be included, like a server upgrade, moving offices, adding new employees and, of course, the software and hardware you need to purchase.

Is your help desk local or outsourced?

Our Answer: Be careful because some IT companies may outsource this critical function. As a result, you may get a tech who is not familiar with you, your network, previous problems and personal preferences. Or worse, they may not be as qualified or accountable. This can be frustrating and lead to the same problems cropping up over and over, longer resolution time and you having to spend time educating the tech on your account.

Fortunately, we have our own Australian based help desk and secure systems that hold all technical data and history of previous calls, your preferences and system information. When you work with our local help desk technicians, they’ll be more capable of successfully resolving your IT issues and handling things the way you want.

How many engineers do you have on staff?

Our Answer: Be careful about hiring smaller or one-person IT organisations that only have one or two techs or that outsource this critical role. Everyone gets sick, has emergencies, goes on vacation or takes a few days off from time to time. We have more than enough full-time techs on staff to cover in case one is unable to work.

ALSO: Ask how they will document fixes, changes, credentials for your organisation so if one tech is out or unavailable, another can step in and know your network settings, history, previous issues, etc. and how those issues were resolved. This is important, or you’ll be constantly frustrated with techs who are starting over to resolve a known issue or may screw up something because they don’t understand or have a blueprint of your computer network.

Do you offer documentation of our network as part of the plan, and how does that work?

Network documentation is exactly what it sounds like: the practice of maintaining detailed technical records about the assets you own (computers, devices, software, directory structure, user profiles, passwords, etc.) and how your network is set up, backed up and secured. Every IT company should provide this to you in both written (paper) and electronic form at no additional cost and update it regularly.

Why is this important? There are several reasons:

First, it shows professionalism and integrity in protecting YOU. No IT person or company should be the only holder of the keys to the kingdom. Because we document your network assets and passwords, you have a blueprint you can give to another IT person or company to take over if necessary.

Second, good documentation allows the engineers working on your account to resolve problems faster because they don’t waste time fumbling their way around your network trying to find things and uncover accounts, hardware, software licenses, etc.

Third, if you had to restore your network after a disaster, you’d have the blueprint to quickly put things back in place as they were.

All our clients receive this in writing and in an electronic form at no additional cost. We also perform regular reviews and updates on this material to ensure certain key people from your organisation have this information and know how to use it, allowing you complete control over your network.

Do you meet with your clients regularly as part of your managed services agreement?

Our Answer: To us, there’s nothing more important than face-to-face time with our clients. Therefore, we make it a priority to meet with all our clients at least quarterly (sometimes more often) and provide a “technology review.”

In these meetings, we provide you with the status updates of projects you’re working on and of the health and security of your network. We also make recommendations for new equipment and upgrades you’ll be needing soon or sometime in the near future. These meetings with you are C-level discussions (not geek-fests) where we openly discuss your business goals, including your IT budget, critical projects, compliance issues, known problems and cybersecurity best practices.

Our goal in these meetings is to help you improve operations, lower costs, increase efficiencies and ensure your organisational productivity stays high. This is also your opportunity to give us feedback on how we’re doing and discuss upcoming projects.

If I need or want to cancel my service with you, how does this happen, and how do you offboard us?

Our Answer: Make sure you carefully review the cancellation clause in your agreement. Many IT companies hold their clients hostage with long-term contracts that contain hefty cancellation penalties and will even sue you if you refuse to pay.

We would never “force” a client to stay with us if they are unhappy for any reason. Therefore, we make it easy to cancel your contract with us, with zero contention or fines. Our “easy out” agreements make us work that much harder to exceed your expectations every day, so we keep your business.


How do you lock down our employees’ PCs and devices to ensure they’re not compromising our network?

Our Answer: The full answer to this question can get a bit technical. The key is that they HAVE an answer and don’t hesitate to provide it. Some things they should mention as a minimum are:

  • 2FA (two-factor authentication)
  • Advanced end-point protection, NOT just antivirus
  • Security Awareness Training
  • VPN Access When Required

Because a combination of these lockdown strategies is essential to protecting your network and data, we employ ALL of these for our clients. Effective cybersecurity should never compromise between choosing this OR that. It should feature every weapon in your arsenal.

Do you have a SOC (Security Operations Centre), and do you run it in-house or outsource it? If outsourced, what company do you use?

Our Answer: A SOC (pronounced “sock”), or security operations centre, is a centralised department within a company to monitor and deal with security issues pertaining to a company’s network.

What’s tricky here is that some IT companies have the resources and ability to run a good SOC in-house (this is the minority of outsourced IT businesses out there). Others cannot and outsource it because they understand their abilities and limitations (not entirely a bad thing).

But the key thing to look for is that they have one. Less experienced IT consultants may monitor your network hardware, such as servers and workstations, for uptime and patches, but they might not provide security monitoring. This is particularly important if you host sensitive data (financial information, medical records, credit cards, etc.) and fall under regulatory compliance for data protection.

Rest assured, we have a SOC to provide proactive security monitoring for our clients to better prevent a network violation or data breach.

Backups And Disaster Recovery.

Can you provide a timeline of how long it will take to get my network back up and running in the event of a disaster?

Our Answer: There are two aspects to backing up your data that most business owners aren’t aware of. The first is “fail over” and the other is “fail back.” For example, if you get a flat tire, you fail over by putting on the spare tire to get you to a service station where you can fail back to a new or repaired tire.

If you were to have a disaster that wiped out your data and network – be it a ransomware attack, natural disaster or something else – you want to make sure you have a fail-over solution in place, so your employees can continue to work with as little interruption as possible. This fail-over should be in the cloud and locked down separately to avoid ransomware from infecting the backups as well as any physical workstations and servers.

But, at some point, you need to fail back to your full operating network, and that’s a process that could take days or even weeks. If the backups aren’t done correctly, you might not be able to get it back at all. So, one of the key areas you want to discuss with your next IT company or consultant is how they handle both data backup AND disaster recovery. They should have a plan in place and be able to explain the process for the emergency fail-over as well as the process for restoring your network and data with a timeline.

In this day and age, regardless of natural disaster, equipment failure or any other issue, your business should ALWAYS be able to be operational with its data within six to eight hours or less, and critical operations should be failed over immediately.

We understand how important your data is and how getting your team up and running quickly is essential to your business success. Therefore, we provide options, in the event of any disaster, we can confidently get your network back up and running in a couple of hours or less.

Do you INSIST on doing periodic test restores of my backups to make sure the data is not corrupted and can be restored if a disaster occurs?

Our Answer: A great IT consultant will place eyes on your backup systems every single day to ensure that backups are actually occurring, and without failures. However, in addition to this, your IT company should perform a monthly randomised “fire drill” test to restore some of your files from backups to make sure your data CAN be recovered in the event of an emergency. After all, the WORST time to “test” a backup is when you desperately need it.

If you don’t feel comfortable asking your current IT company to test your backup OR if you have concerns and want to see proof yourself, just conduct this little test: Copy three unimportant files onto a USB drive (so you don’t lose them) and delete them from your server. Make sure one was newly created that same day, one was created a week earlier and the last a month earlier. Then call your IT company and let them know you’ve lost three important documents and need them restored from backups as soon as possible. They should be able to do this easily and quickly. If not, you have a problem that needs to be addressed immediately!

Verifying your backups daily and testing them on a regular basis is a cornerstone of a successful overall IT strategy. These are the lengths we go to for all our clients, including multiple random “fire drill” test restores to ensure your files are safe because they are always backed up.

Ask your IT provider about compliance with the “3-2-1” rule of backups that states you should have three copies of your data: your working copy, plus two additional copies on different media, with at least one being off-site for recovery. We recommend three copies of your data, on at least two different medias and locations as well as cover for backup AND disaster recovery…

If I were to experience a location disaster, pandemic shutdown or other disaster that prevented me from being in the office, how would you enable me and my employees to work from a remote location?

Our Answer: If Covid taught us anything, it’s that work-interrupting disasters CAN and DO happen when you least expect them. Fires, floods, hurricanes and cyclones can wipe out an entire building or location. Covid forced everyone into lockdown, and it could happen again.

We could experience a terrorist attack, civil unrest or riots that could shut down entire cities and streets, making it physically impossible to get into a building. Who knows what could be coming? Hopefully NONE of this will happen, but sadly it could.

That’s why you want to ask your prospective IT consultant how quickly they were able to get their clients working remotely (and securely) when Covid shut everything down. Ask to talk to a few of their clients about how the process went.

Show me your process and documentation for onboarding me as a new client.

Our Answer: The reason for asking this question is to see if they HAVE SOMETHING in place. A plan, a procedure, a process. Don’t take their word for it. Ask to SEE it in writing. What’s important here is that they can produce some type of process. Further, they should be able to explain how their process works.

One thing you will need to discuss in detail is how they are going to take over from the current IT company – particularly if the current company is hostile. It’s disturbing to me how many IT companies or people will become bitter and resentful over being fired and will do things to screw up your security and create problems for the new company as a childish way of getting revenge. (Sadly, it’s more common than you think.) A good IT company will have a process in place for handling this.

Other Things to Notice And Look Out For.

Are they good at answering your questions in terms you can understand and not in arrogant, confusing “geek-speak”?

Good IT companies won’t confuse you with techno mumbo-jumbo, and they certainly shouldn’t make you feel stupid for asking questions. All great consultants have the “heart of a teacher” and will take time to answer your questions and explain everything in simple terms. As you interact with them in the evaluation process, watch for this.

Our technicians are trained to take time to answer your questions and explain everything in simple terms.

Do they and their technicians present themselves as true professionals when they are in your office? Do they dress professionally and show up on time?

If you’d be embarrassed if YOUR clients saw your IT consultant behind your desk, that should be a big red flag. How you do anything is how you do everything, so if they cannot show up on time for appointments, are sloppy with paperwork, show up unprepared, forget your requests and seem disorganised in the meeting, how can you expect them to be 100% on point with your IT? You can’t. Look for someone else.

Our technicians are true professionals who you would be happy to have in your office. They dress professionally and show up on time, and if they cannot be there on time (for some odd, unforeseen reason), we always notify the client immediately. We believe these are minimum requirements for delivering a professional service.

Do they have expertise in helping clients similar to you?

Do they understand how your business operates the line-of-business applications you depend on? Are they familiar with how you communicate, get paid, service your clients or patients and run your business?

A final word and Free Offer to engage with us.

I hope you have found this guide helpful in shedding some light on what to look for when hiring a professional organisation in Melbourne to outsource your IT support. As I stated in the opening of this report, my purpose in providing this information is to help you make an informed decision and avoid getting burned by incompetent or unethical companies luring you in with cheap prices.

We welcome the opportunity to work closely with our clients and take pride and joy in supporting their business success. Contact us today to see how we can help you.

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