The questions that should be asked by anyone that is responsible for making sure the business is running properly and profitable are:
How can I reduce my operational cost and get more resources for my business?
One of the best ways to do this is to outsource IT, which is the technical support and management of the software and hardware used to keep your business operating.
IT support is a non-core business function and most businesses should be looking to outsource their non-core business functions. What are non-core business functions? Ask yourself this, if you are not an accounting firm why are you doing your own accounting, if you’re not a law firm then why are you making legal decisions in the same respect if you are not a technology company then why are you handling your own IT.
Companies need to focus on what they do best and what makes them money and leave everything else to other resources that are more skilled and capable of handling those things better.
Let’s talk about What IT services can be outsourced.
Your outsourced IT provider should be freeing up your time and your employee’s time when it comes to technology. Some of the ways they will do this are:
1. Vendor Management
By managing all of your technology vendors, you or your staff should not be spending non-productive dealing with technical issues.
2. Technology Planning
Research new and existing technology and strategies that will fit your company. Your Outsourced IT should know your business and be able to offer options that you can make educated business decisions on. Without you spending your own time researching.
3. Optimizing the Adoption and Use of Technology
Since your Outsourced IT gets compensated based on the size of your company. They will be motivated to help you grow. Your growth and their growth are in alignment. They will have a high motivation of making you more productive.
4. Solving Problems Around Technology
They should be proactively finding ways to prevent issues that will delay productivity and then be the listening ear and the helpful hand that will solve problems when they do arise.
You should be looking to free up your business resources from dealing with technology issues. Small businesses cannot afford to hire the best talents in-house. If they go that route it is normally not the best talent but the mediocre talent at the cheapest price and that is a formula for disaster.
In business, good enough does not equal success.
There is no growth in good enough. Hiring in-house looks cheaper at the beginning but most businesses look at the cost of hiring an outsourced company but do not do the calculations of how much it is costing them to hire and retain staff.
Let’s take a look at the cost of Hiring a single person in-house to take care of your IT.
In this example, I will not include the cost of finding the right candidate whether it is paying for an ad, the cost of hiring a head hunter, or a staffing company. The lost time for you and the company of training, etc . etc. I will assume you got lucky and you found someone you like.
On the latest information from salary.com, a qualified Network Engineer will cost about $70,000 annually as a base salary. But it does not stop there.
If you include:
- Bonus
- Social Security
- 401K
- Disability
- Healthcare
- Pension
- Time Off
that hire goes from an investment of $70k to $102K investment.
Also, a productive employee gives about 6 hours of work a day. Why is that? Well, there are lunch breaks and morning coffee. It takes the average person 15 minutes in the morning to start and 15 minutes to reengage in their work every time they are interrupted by the phone, email, text, web meeting, etc.
This does not include downtime if there are any technical issues that slow their day.
Also, most people start to prepare for the end of the day 30 minutes before their shift is over.
So 6 hours of work is a good day for a productive employee. So $120K being paid you are actually losing 25% or $30,000 of time per employee. The less productive an employee is the more a company loses.
What is needed is to think smart and leverage the pool of talent that is available by outsourcing. They can do a better job and you will save because you do not pay for the time they do not work.
