IT managed services challenges are becoming a critical concern for businesses striving for efficiency. While these services promise streamlined operations, they often come with obstacles that demand attention.

In 2024, an estimated 73% of companies are using managed IT services, showcasing their rising importance. Yet, this widespread adoption highlights the pressing need to overcome. 

Sheikh Sadiq, CEO of ALIS Technology, says, “As businesses scale, the complexity of managed services grows, making strategic oversight essential.” This emphasizes the need for proactive measures to tackle common provider issues before they escalate.

This blog explores the top challenges businesses face with managed IT services, offering actionable solutions. From provider reliability to cost management, you’ll find insights to ensure your IT strategy stays on track.

How to Tackle IT Managed Services Provider Challenges Effectively

1. Unreliable Provider Support

One of the most pressing IT managed services challenges is inconsistent provider support. Businesses often experience delayed responses or subpar assistance, which disrupts operations and impacts trust.

This issue is particularly problematic for organizations relying on managed services providers (MSPs) for critical tasks like 24/7 monitoring and cybersecurity management.

Cloudsecuretech reports that there are approximately 40,000 managed service providers in the U.S., highlighting how the market is saturated, making it difficult to find dependable partners. Unreliable support can lead to extended downtime, lost productivity, and even financial losses for businesses that need issues resolved quickly.

To address this, companies must focus on SLAs that clearly outline response times and escalation processes. Providers offering proactive monitoring and dedicated account managers are more likely to deliver consistent, high-quality support.

Remember, reliable service is not a luxury—it’s a necessity for sustained success.

Read More Articles:
Understanding Managed IT Services Pricing: A Comprehensive Guide What Are Managed IT Services? How to Choose Managed Services Provider: Your Complete Guide to Making the Right Choice

2. Hidden Costs and Budget Overruns

Hidden costs remain a significant managed services provider challenge for organizations seeking predictable IT spending. Many MSP contracts fail to account for unexpected expenses like urgent upgrades or specialized support, which strain budgets.

Key sources of hidden costs include:

• Emergency service fees for critical issues that can escalate quickly.
• Costs for hardware or software upgrades can strain resources and delay improvements.
• Overcharges for exceeding service limits can catch your business off guard.

With 75% of SMEs outsourcing their IT management to MSPs, financial transparency is essential. Businesses should prioritize providers offering detailed cost breakdowns and flat-rate pricing to avoid unwelcome surprises.

Here’s a structured view of hidden costs, their impact, and actionable mitigation strategies to help businesses better navigate MSP contracts.

Hidden Cost	Impact	Solution
Emergency service fees	Strains budgets during crises	Flat-rate contracts with after-hours support
Hardware or software upgrades	Delays improvements, affects efficiency	Include upgrades in service agreements
Overcharges for exceeding service limits	Unexpected expenses disrupt budgets	Flexible plans with clear usage terms
Unused or underutilized services	Paying for services not needed	Regularly audit service usage
Vendor lock-in costs	High fees for switching providers	Seek contracts with no penalty clauses
Lack of proactive maintenance	Leads to costly downtime and repairs	Choose providers offering proactive support
Poor contract transparency	Hidden fees create financial uncertainty	Demand detailed cost breakdowns upfront

3. Security Gaps

Cybersecurity is a growing IT managed services challenge, as insufficient security protocols leave businesses exposed to breaches. Common gaps include weak encryption methods, delayed updates, and limited network monitoring. 

As businesses increasingly rely on MSPs to secure their systems, evaluating a provider’s security credentials is critical. Comprehensive frameworks, such as zero-trust policies and continuous vulnerability assessments, are indicators of a proactive approach to cybersecurity.Security risks often arise when MSPs fail to keep pace with emerging threats. Companies must partner with providers committed to adopting advanced tools and staying updated on best practices.

Always remember – Preventing breaches is far less costly than recovering from one.

4. Limited Scalability

Scalability issues are a common IT managed services provider challenge, especially for companies experiencing rapid growth. Providers often lack the flexibility to accommodate expanding operations, leaving businesses constrained.

Scalability challenges often include:

• Fixed service plans unsuitable for fluctuating needs.
• Limited cloud infrastructure for remote operations.
• Insufficient resources to support additional users or locations.

With 68% of MSPs expected to provide services remotely by 2025, scalability should be a top priority when selecting a provider. Businesses must look for MSPs that offer modular plans and can grow alongside them.

5. Misaligned Expectations Between Businesses and MSPs

Misaligned expectations remain one of the most overlooked challenges in managed IT services. Providers often promise results they cannot deliver, leading to unmet objectives and dissatisfaction.

Lack of communication about project scope or progress exacerbates this issue, creating a disconnect between businesses and their MSPs.

This challenge highlights the importance of transparency and collaboration. Regular progress meetings and clear KPIs ensure that both parties remain aligned. Businesses should also engage in thorough discovery discussions with potential providers to verify they understand specific goals and needs.

Properly aligning expectations is more than setting targets; it’s about creating a partnership built on trust. When communication is clear, businesses are better positioned to achieve meaningful outcomes with their IT investments.

6. Dependence on Outdated Technology 

Outdated tools are a persistent managed services challenge, preventing MSPs from offering innovative and efficient solutions. Businesses that rely on such providers often face slower systems, inefficiencies, and reduced competitiveness.

Effects of outdated technology include:

• Inability to integrate modern solutions like AI and advanced automation tools effectively.
• Longer issue resolution times due to inefficient tools and outdated processes.
• Higher vulnerability to cybersecurity threats from unpatched systems.

Businesses must seek MSPs that continuously update their technology stack. Providers committed to innovation can drive greater efficiency and ensure their clients remain competitive in evolving markets.

ALIS Technology – Solutions Rooted in Understanding and Expertise

Overcoming managed IT services challenges requires more than technical expertise—it demands a partner who listens, understands, and aligns with your unique goals. We specialize in addressing common pain points with clarity and purpose, ensuring every solution is tailored for success.

Here’s Where You Can Find Our Managed IT Services
New York	Chicago

Ready to navigate challenges with confidence? Contact us.