What IT Service Firms Should Know About Controlling Costs

SMBs typically work with tight IT budgets, so they prioritize cost efficiency when choosing an IT services firm to partner with. 

But how do SMBs envision Managed Service Providers (MSPs) cutting the costs of their services?  

TSL Tech Research surveyed 365 leaders at small and medium-sized businesses (SMBs) with 50 to 500 employees to find out how they want IT service firms to reduce costs for companies like theirs.  

Here’s an overview of our findings and what they mean for IT service firms that want to partner with SMBs. 

Top Ways to Control IT Service Costs 

When we asked companies to identify ways to control IT service costs, the top ways were AI-powered automation and better task utilization. Nearly half look for help optimizing software licensing and subscription costs. 

The top 3 ways to control IT service costs chosen by SMBs were: 

• 53% Chose automating repetitive tasks and processes 

• 48% Chose better utilization of the right resources for tasks 

• 47% Chose optimizing software licensing and subscriptions 

 Followed by: 

• 43% Improved services efficiency 

• 35% Conducting regular audits to identify and eliminate waste 

• 25% Consolidating vendors and renegotiating contracts 

• 21% Lower hourly rates 

• 21% Shifting to a usage-based pricing model (ie: pay-as-you-go) 

IT service firms can use these findings to better promote their managed services as cost-effective alternatives to in-house technology management.  

Controlling Costs Through AI-Powered Automation 

More than half of the SMBs surveyed identified automating repetitive tasks and processes as a way for IT service firms to reduce costs. This finding uncovers an opportunity for MSPs to promote services that support developing and deploying AI-powered automation.  

IT service firms may offer managed services for designing and building AI DevOps environments or implementing AI applications for automating manual workflows. 

Optimizing Resource Allocation 

Almost half of the survey respondents believe that utilizing resources efficiently helps reduce costs. IT service providers should help SMBs align expertise with costs by strategically allocating human resources to areas where specialized skills deliver the most value. This approach maximizes return on investment (ROI) by getting the most value from skill sets and knowledge bases. 

IT service firms can also help SMBs efficiently allocate IT assets to support and prioritize operations. 

Getting More from Software Investments 

Nearly half of the IT leaders at SMBs wanted IT service providers to control costs by optimizing software licensing and subscriptions. Managing licenses and subscriptions from multiple vendors can be challenging for companies. IT service providers can step in to minimize the cost and maximize the value of software investments.  

For example, an MSP can ensure a company has the right number of licenses and is effectively using those licenses. IT service firms can attract SMBs by promoting their ability to negotiate favorable terms with software vendors. 

Controlling Costs for SMBs 

The mission of TSL Tech Research is to conduct original online research surveys to help IT service firms understand what companies want from an MSP. The insights gathered from our research can be used to target and attract customers. 

The information provided by our research into how SMBs want IT service firms to cut costs helps MSPs know which services to promote and the need to emphasize how these services control costs. 

Want to find out more about what companies want from an IT service provider? Reach out to TSL Research to run a survey or ask us to tailor a survey for your IT business.