Monday, 13 January 2020

How much should IT support cost?

While “you get what you pay for” might be less obvious in terms of IT support, it’s likely to be a much more critical relationship for your business.

The old maxim that “you get what you pay for” is true in so many service professions. If you’ve ever hired graphic designers or SEO “experts”, you’ll know that they are not all created equal. While it might be less obvious in terms of IT support, it’s likely to be a much more critical relationship for your business.

Reducing costs and overheads is a vital part of maximising profit in any successful business strategy. Optimising budgets helps to add directly to the bottom line and is more easily controlled than the other end of the equation, i.e. creating demand and setting prices.

However, there are limits.

At a certain point, cutting costs can end up costing your business more.

The clearest example of this is probably hospital “bed blocking”: by reducing costs in social care, additional costs are added into the system (a much more expensive part of the system) – ultimately costing more and delivering worse outcomes.

Balancing investment with risk

The equivalent of bed blocking in IT support is choosing to work with an IT provider that simply can’t deliver the service you need. Preventative costs are almost always a tiny fraction of the cost of reactive maintenance or support.

For example, post GDPR, compare the cost of dedicated IT security and risk planning and implementation against the cost of a fine from the Information Commissioner’s Office (ICO) after a data breach.

While good IT security and risk management can be implemented from as little as a couple of hundred pounds a month (depending on the size of your organisation) a fine under GDPR can be a much as four percent of annual turnover. And that doesn’t even begin to reflect the cost of the business disruption, reputational damage and loss of productivity.

All of these will most definitely hit your bottom line!

Or perhaps business has ground to a halt because a staff member has just clicked on a link in an email and downloaded a virus that has paralysed business systems or accidentally shared login credentials that are used for criminal purposes… that cyber-security training budget begins to look a lot more reasonable, doesn’t it?

The more subtle costs of poor support

Poor quality IT support can be felt in many ways; it isn’t always as dramatic as a security or breach event where data or systems are compromised.

In fact, those daily niggles could actually be costing your business a great deal.

What about that request you raised several weeks or months ago, but which still hasn’t been resolved? How much more productive could you be if you didn’t have to wait ten minutes for the computer to boot up? Or it didn’t crash each time you launched that memory-intensive graphics software you use? Or even that unwieldy spreadsheet?

While these irritating issues might result in just a five or ten-minute loss of productivity per day, for the six months that request has remained unresolved, that loss of productivity has added up to around eleven hours – almost two working days.

Not to mention the daily frustration and its associated dip in morale with your staff who just want to get on with things and help make you money or meet your organisations goals: how does that affect productivity and output?

Investing in your people

Business and marketing guru Seth Godin makes a similar point about the need to invest in appropriate training:

“Consider an employee who is going to work 2,000 hours for you this year. It's not unusual for an organisation to spend only 10 or 20 hours training this person – which means about 1% of their annual workload. How much training would it take for this person to be 10% better at her job? If you invest 100 hours (!) it'll pay for itself in just six months. There aren't many investments an organisation can make that double in value in a year.”

He goes on to underline how “The short-sighted organisation decides it's 'saving money' by cutting back training. After all, the short-term thinking goes, what's the point of training people if they're only going to leave. (I'd point out the converse of this–what's the danger of not training the people who stay?).”

Of course, your IT provider needs to constantly invest in skills and training too. The technology world moves fast and the security aspect of it is especially vital to keep up with given the incredible rise in cyber crime.

While 'company X' might be able to offer you a great deal on your monthly rates, ask yourself how they can afford to do that – it’s likely they are not using suitably qualified staff or investing in ongoing training. What effect does this have on their ability to help support and advise your team? Are they motivated and paid enough to care? Is that really the team you want looking after your critical business systems and your people?

When you’re choosing an IT partner, it might be worth adding an extra question to your checklist: how much time, effort and money do they invest in training and developing their staff?

Hidden costs

It is certainly true that good IT support technicians are an expensive resource. They can also be hard to find.

Datto’s State of the MSP (that’s today’s fashionable term for IT Service Companies) report 2019 found that 71 percent of managed service providers expect to recruit between 1 and 5 people over the next 12 months.

Furthermore, 45 percent of MSPs in Europe report it will be harder to recruit the new talent they need this year. This figure compares against 37 percent globally, who expect it to be harder to recruit new talent this year.

Cheap prices may seem initially attractive but there’s a really simple way of looking at it. How many staff have you got and how much is being offered to you as a monthly fee?

If you employ 20 people and are being offered support for £500 a month, how much support are you realistically going to get for £25 per user? The IT provider will have overheads, like you, and will likely be delivering support in a reactive manner and just hoping that things don’t go wrong. (Or perhaps that’s why they don’t call you back…)

Is it possible that you will be setting yourself up for additional or hidden costs further down the line? Or, possibly, simply not getting the level of support your business realistically needs?

If you aren’t working with a partner who really has your best interests at heart and is giving you realistic prices based on your need, you may be setting yourself up for a higher total bill in the end – whether that comes from hidden costs or, worse case scenario, firefighting when things go wrong. Either way, it’s frustrating.

We’ve also come across many potential customers who find themselves getting involved in managing IT issues day-to-day even when they are paying someone else to support them. If that sounds familiar to you, what would you give yourself as an hourly rate? How much time each month are you or your staff spending trying to fix things yourself or to manage the supplier each month?

So what is the right level of investment?

There are no easy answers as to what represents the right level of investment in IT support. Every organisation will have a different answer to this question.

Godin makes this point that too heavy a focus on cost cutting “happens to organisations regardless of size or stature. It's a form of entropy. Unless you're vigilant, the apparently easy path of cost reduction will distract you from the important work of value creation.”

And perhaps that’s the most important conversation to have with your IT support partner: begin with where they can add value rather than where they (or you!) can take out cost.

If you’d like some further advice and top tips for choosing an IT partner, we’ve put together a short guide that reveals 6 Secrets from within the IT industry… you can request a copy here