The True Cost of IT

What are your computer systems really costing your organization? Here are some key questions to ask.

In today’s hyper-competitive marketplace, organizations of all sizes are looking for ways to improve efficiency and customer service while keeping expenses in check. IT budgets often come under scrutiny, as organizations seek to squeeze the last drop of value out of existing systems and minimize support and maintenance costs.

“Cost” does not always equate to “value,” however, particularly when it comes to technology. If not properly managed and maintained, IT systems can actually increase operational costs, sap productivity and negatively impact customer service.

This is particularly true for organizations that put off technology upgrades and “make do” with older equipment that’s going to be more prone to failure and downtime. But even organizations that regularly refresh their IT systems need to take a look at the real cost of ongoing maintenance in terms of both dollars and competitive advantage.

Often, in-house IT teams struggle to keep up with routine maintenance tasks, and organizations end up several steps behind the latest patches, upgrades and security updates. The results can be devastating.

A managed services solution that provides monitoring and proactive maintenance of IT systems can help prevent downtime and unexpected costs. As the managed services market has matured, however, numerous providers have emerged with pricing at commodity levels. When assessing whether to outsource or comparing managed services providers, it’s important to understand true costs of IT maintenance along with the value of efficient and secure computer systems.

• What does one hour, five hours or eight hours of IT downtime cost my business? If your organization relies upon IT for day-to-day operations — and what organization doesn’t? — then every hour of computer downtime is an hour of lost business. According to a recent report from IDC Research, downtime costs small businesses a staggering $20,000 per hour. In addition to lost revenue and productivity, downtime can impact intangibles such as customer service and goodwill. The cost increases with extended downtime, with many small businesses simply unable to recover.
• How much time does my staff spend fixing IT problems? Even organizations that do not have dedicated IT staff have someone who responds to IT issues, and those “shoulder tap” requests for help can really add up. There are hidden costs here as well. For example, what are the risks to the business if the one person who keeps things running gets sick, goes on vacation or leaves the company?

• How much of my budget is spent simply maintaining my current IT systems? Experts say organizations spend two-thirds of their IT budgets simply fixing desktops and servers, performing backups, and handling other maintenance and support tasks. That percentage may be higher among smaller organizations that have postponed new technology investments. That doesn’t leave much room for innovation.
• What are the costs of “reactive” IT maintenance? Responding to IT problems as they arise increases maintenance expenses and puts the organization at much greater risk of downtime or a security breach. Proactive IT maintenance helps insure the business against those risks.

• Can my cash flow take a big “hit” right now? Computer system problems that crop up unexpectedly can cost thousands of dollars to repair, and the price goes up if the repair is done on an emergency basis. That’s tough to swallow — particularly when proactive maintenance can prevent many problems and smooth out IT expenses.

Armed with an understanding of how much reactive IT really costs the business, owners and managers can make more-informed decisions about ongoing computer system maintenance and management. SMBs can then ascertain whether a managed services solution can help them reduce overhead while improving availability and security, and select the best managed services provider to meet their business needs.