How much should you be spending on IT?

How much should you be spending on IT?

A closer look at the different cost drivers and what is reasonable for a small business

How much does it cost? We’ve all uttered these words thousands of times when considering a purchase. And whether it’s a new car, a plumbing repair or entertainment system, price often plays an important role when determining to purchase a product. So what about IT? How much money do you have to throw at it to ensure it’s not a problem in your business? According to the US Bureau of Labor Statistics, the average IT professional earned $80,020 in 2012. Sounds like a lot, right? What may be even more alarming is that you may need to employ more than one of them to resolve all your business’s IT issues. Because of this many small and medium-sized business owners in Rochester and Buffalo, New York settle for a break/fix contractor instead. This enables them to pay ONLY for service when they need help. On the surface this seems like a completely logical thing to do as servicing your IT this way couldn’t possibly cost more than a quarter of the price it takes to employ a full time IT professional. But is this really the true cost of break/fix service? Let’s take a closer look.

 Obvious costs of IT for your small business

Break/fix contractor or not, there are certain IT expenses every business has no matter who they employ to support their IT. Some of these obvious expenses include antivirus and spyware software, computer repairs, and offsite backup, and these costs can vary depending on the specific solutions and service providers you choose. Where it starts to get more interesting ( or maybe “concerning” is a more appropriate word) is when you start looking at all the not so obvious costs. Not sure what we’re talking about? Let’s look closer.

 Hidden costs

Some small business owners would prefer to just ignore the hidden costs. And we can’t blame you as oftentimes they’re quite alarming. Doing so, however, will catch up with you and eat into your profits eventually, which is why we seriously advise you to examine the true IT costs every successful business owner must come to terms with. So take a deep breath, stay calm, and read on. If at any point you become too overwhelmed, go grab a cup of tea and a breath of fresh air, then come back right here. Or simply pick up your phone and give us a call, and we’ll be happy to talk you through it. So without further ado, let’s dig into the real costs of IT service.

 Downtime

This is the dirty little word all business owners dread. Nothing is more frustrating than when your computers go down and your staff turn to their phones or water cooler chat, all the while you’re paying for the impromptu break.

On average, Microsoft estimates one, fifteen-minute crash occurs once a week per employee, adding up to one hour a month. Of course, computer crashes do not encompass the whole spectrum of downtime. Downtime also occurs when slow computers cause your employees to twiddle their thumbs as they wait on the spinning blue ball or pinwheel of death. This and other minor computer issues add up to an hour of wasted time per employee per month, according to Microsoft. If you use a break/fix contractor, the downtime can be much worse as it can take hours (maybe even days) before a simple IT malfunction or crash is repaired, all the while the wasted hours by employees pile up.

Procurement

Another cost often forgotten by business owners is the time it takes to procure a product. So ask yourself, how many hours a month do employees spend evaluating technology, selecting vendors and financing? Write down the number on a piece of paper and let’s move on to the next figure.

Asset management

Once you’ve procured your product, the next item to think about is Asset management. How many hours per month do your employees spend tracking warranty info, licensing, expiration, conversing with the vendor about a specific product, etc? Estimate the number, and then write it down.

Spam

The bane of existence for employees and business owners alike, spam or junk mail is not only a headache to deal with, but eats up valuable work hours too. According to Microsoft, the average employee loses 12 minutes a day to spam, or approximately 4 hours per month.

Security

A cyber attack or security breach to your business can wreak havoc on the productivity of your employees. And if you suffer a serious breach, you could be in store for an enormous downtime hit. Ransomware, which is becoming more and more prevalent, caused over a week of downtime for the staff of Los Angeles’s Hollywood Presbyterian Medical Center this past February. During this time, the hospital was locked out of some of their IT systems and was unable to function normally, having to turn patients away. So how many hours of wasted salary would your business lose if your employees lost a week due to a serious security breach? Add up the number of employees and multiply that number by 40.

Pretty big, huh? Well, let’s assume you’re lucky for now and say you don’t suffer a major security breach in the next year. Instead let’s just focus on some of the numbers you came up with and the Microsoft estimates we gave above.

Total costs

To accurately determine the total hidden costs of IT in your business, you’ll also need to know the number of employees in your business and estimate what your average employee earns. Multiply these two numbers and then multiply their total with your estimates of time spent procuring IT and asset management per year, plus the number 72 (the number of hours wasted per employee, per year according to the Microsoft estimates above). Here’s what the formula should look like.

Total number of hours wasted on IT issues x
your number of employees x average employee salary

=  Total hidden IT costs for your business

For many business owners, this number is going to be quite high. And if you suffer a security breach, the total costs could easily double or quadruple. So, let’s return to the question we asked at the very beginning of this article... how much does it cost? Obviously, you see now the real costs of IT in your business, and employing a full-time IT guy doesn’t necessarily make it better when considering the $80,020 salary. So do you have any other options? We invite you to try Capstone IT’s Managed Services. This IT solution can eradicate the downtime, asset management and procurement costs completely. It can get the IT headaches out of your hair so you can focus on your business. And perhaps best of all, downtime can become a thing of the past, as this proactive service catches and fixes small IT problems before they blow up into massive downtime. In fact, most of the time you’ll never even know you had an IT malfunction to begin with, as we caught it before you saw it.

We also offer Spam protection and Security services, both of which will help prevent a catastrophic malware or ransomware attack. Additionally, our Spam service keeps junk email out of your employees inbox so they can save that 48 hours of wasted time per year and put it into another extra week of work. How’s that for savings?

Our IT services at Capstone IT are a fraction of the cost of hiring a full time IT professional or break/fix contractor. So if you’re ready to make your business more productive and waste a lot less time worrying about technology, call us today to get started. More profits are waiting.

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