Managed IT Payback Calculator

This calculator estimates how long a move to managed IT takes to pay for itself. Enter the one-time cost of making the switch, then your honest estimate of the yearly net benefit: hours of productive time recovered from fewer outages, the cost of the break-fix invoices or part-time contractor you stop paying, retired software or hardware, and the value of risks reduced, minus the new yearly managed services fee.

Method: each year's benefit equals the previous year's times (1 + growth). Payback is the point where cumulative benefit equals the one-time cost, interpolated within the year. Net gain is total benefit across the horizon minus the one-time cost.

Worked example (illustrative): an $8,000 one-time cost and a $9,000 yearly net benefit growing 3 percent pay back in about 0.89 years. Over 3 years the benefit totals 9,000 + 9,270 + 9,548 = $27,818, so the net gain is $19,818.

Limits: the result is only as good as the benefit estimate. Value recovered hours at a realistic loaded hourly cost, count only time you will actually put to use, and be conservative about avoided incidents. If managed IT costs more than it saves, the yearly net benefit is negative and the tool will show no payback; in that case the case for outsourcing rests on risk and capacity rather than savings.