The world of IT is certainly not immune to the price vs. cost dilemma. Looking over your monthly IT invoice at times can be as confusing and scary as opening up the next bill from your accountant or lawyer. Deep down you know you can’t survive without these services, but as the business head you really don’t have the expertise to validate the work performed on the invoice nor the time it took to keep your cloud, network, desktop, and mobile IT infrastructure humming along while absolutely nobody notices. These costs are amplified particularly when revenues are down as new business and projects are scarce. While you might be able to cut these costs back to some degree, the essential nature of IT in today’s business environment necessitates that you effectively manage them from a price vs. cost standpoint. After all, you wouldn’t cut off your natural gas provider in the dead of winter, nor is it wise or practical to cut off your IT support when times are tough.
But there certainly are ways to keep these costs in check without having to hit the local technical institute for a night course on the latest trends in programming, operating systems, and hardware advancements. Let’s take a brief look at a couple of areas where every business head can have a meaningful impact on understanding the price of IT, while also controlling the overall costs of running a lean and mean, but cost effective IT infrastructure.
NEW HARDWARE, WHO NEEDS IT?
These days, buying new computer hardware is worse than buying a new car. At least with your car, you know if you properly maintain your vehicle you likely will get tired of your car before it really needs to be replaced. Computer hardware, not so much. When you make the decision to purchase that brand-new server, you’re immediately thinking about the need to replace the unit in 3 to 5 years’ time. Then the conversation turns to the price of the server itself. You
would prefer to get the cheaper stripped down model, while your IT person is pitching the server on performance steroids. And of course that comes at a much higher price. Who’s right? Well both of you are! Try looking at the mid-range models that are just under the newer top end units, as you most likely will still be more than satisfied with the performance, and the lower prices will be much more to your liking. As for costs, you also have to allow for the time and effort it will take to integrate the new hardware into your environment, and do not overlook the need to monitor and maintain these new units during the lifespan of the hardware.
It might be strange talking about new hardware these days, when offices and server rooms across Western Canada are likely littered with surplus hardware gathering dust and waiting to be revived at the hint of new activity. This has resulted in many companies
re-evaluating their IT policies regarding physical vs. virtual servers, and on premise hardware vs. virtual servers, and on premise hardware vs. cloud computing. If you are reluctant to take the plunge in one direction or the other, you may want to consider a hybrid solution which transitions your company out of the perceived higher costs of hardware ownership and ease you into the world of cloud computing. This strategy will definitely impact your capital expenditures for hardware going forward, but you still need to ensure your IT team or managed services provider are cost effectively monitoring, maintaining, and upgrading your network and desktop environments. These costs certainly can’t be ignored but they can be controlled and turned into predicable monthly costs!
THE BLACK HOLE CALLED SUPPORT
Our utility providers are all pitching monthly budget plans to spread out the cost of service in equal monthly installments over a 12 month period. Even our civic governments caught onto this trend with monthly tax installment payment plans rather than the depressing annual tax bill shock and payment. Your IT costs can easily get the same treatment. Rather than operating on the pay as you go model, a managed services contract to support your IT infrastructure is an easy and attractive way to tame unexpected support costs. Here to, companies have to decide whether to hire IT employees or contract out to a local service provider under a managed services agreement. Both scenarios are in essence, monthly managed services! With an employee, you have a monthly predictable expense covering your IT support requirements, while a managed services provider acts in the same capacity, albeit under a monthly contractual basis.
Many companies are turning to managed services providers to mitigate their technology risk and exposure. These companies generally provide a full bandwidth of IT coverage which is more than difficult to maintain internally, particularly for small companies and new start-ups. Their managed services can be packaged up into one tidy monthly fee for all of your IT support requirements, with the knowledge and expectation that you have the power of their more extensive resource base and cross functional experience at your disposal.
While the price may be comparable, the long term cost may not. With one or more employees, you are relying on them to have the expertise and experience to cover off the full breadth of your current and future IT needs. This can be a tall task particularly in the face of the rapidly evolving IT landscape and the many security and external threats we hear about on the news each and every day. Just ask how the DNC is feeling about their server hack during the U.S. presidential campaign and all of the Russian rhetoric and finger pointing that ensued.
Whether you choose the employee vs. managed services route, the next time your servers or website are subjected to an external denial of service attack or malicious hack, the cost to your bottom line in dollars and lost reputation could be immense and crippling to your business. If you skimped on the price for that next hardware purchase or negotiated down to the bare bones for your managed services contract, the cost to your business could be catastrophic! Instead, consider controlling your budgets and reducing your IT exposure with predictable and fair priced monthly IT support services. Those unforeseen and costly invoices will be a thing of the past!