How to Evaluate the ROI of Managed IT Services: A Guide for Businesses Rethinking IT Support

Sep 11, 2023

Business cost

If you’re a business owner, you already know that every investment should have a measurable return. This principle holds true for IT support as well. Many companies are moving away from traditional break-fix IT support models to managed IT services. But how can you evaluate the Return on Investment (ROI) of making such a switch? This guide will break it down for you.

Understanding ROI in the Context of IT Support

ROI, or Return on Investment, is a metric used to evaluate the efficiency or profitability of an investment. When it comes to IT support, calculating ROI involves comparing the cost of managed services to the value they provide to your business.

Cost Factors in Traditional IT Support

The traditional break-fix IT support model comes with various costs, both obvious and hidden. These can include:

  • Hourly rates for repairs
  • Hardware replacement costs
  • Downtime and lost productivity

Cost Structure of Managed IT Services

In contrast, managed IT services typically involve a fixed monthly fee, covering a wide range of IT support tasks like:

  • Monitoring and maintenance
  • Data backup
  • Cybersecurity

How to Calculate ROI for Managed IT Services

To evaluate ROI, you’ll want to compare the total costs of each IT support model against the value they bring. Here’s a simple formula:

ROI = (Net Benefit of Managed IT services - Cost of Managed IT services) / Cost of Managed IT services

Quantifying the Value of Managed IT Services

Measuring the value or net benefit of managed IT services can be trickier than you think. Consider factors like:

  • Reduced downtime
  • Increased employee productivity
  • Enhanced cybersecurity

Case Example: Evaluating ROI for IT Support

Let’s say Company A spent $50,000 last year on traditional break-fix IT support, including downtime costs. After switching to managed IT services at $36,000 per year, they experienced less downtime and higher productivity, estimated at a value of $20,000. Using the ROI formula, their ROI would be:

ROI = ($20,000 - $36,000) / $36,000 = -44.44%

Although the ROI appears negative, remember that the company also saved $14,000 by not using break-fix services, effectively making the ROI positive when considering the alternative.


Evaluating the ROI of managed IT services over traditional IT support models involves more than just comparing costs. It’s essential to consider the full range of benefits that a managed service model can bring to your business. When done right, making the switch can result in significant savings and a more streamlined, efficient operation.

Want Great IT Support?

Want to know how you can get efficient, reliable IT support that works with your business the way you want it?

You may also like…

Monitor Your Microsoft Sign-In Logs!

Monitor Your Microsoft Sign-In Logs!

Ever wondered how you'd know if someone has breached your Office365 account? Think about the implications: They could email your clients or staff, compromise sensitive information, or even hold your files for ransom. As a business owner, you're usually the juiciest...

Stefan’s thoughts on the power of responsiveness in business

Stefan’s thoughts on the power of responsiveness in business

Ever noticed how just a quick reply or an update can make a world of difference in how we feel about a service? That's the magic of being responsive in the business world. This is why I think this seemingly simple act is so impactful: It Builds Trust: When customers...