Here Are Some Tips For Investing In IT
In part one of this blog series, we explained why cheap technology isn’t all that cheap. It costs you more in the long run due to downtime, repairs, and replacement. In a nutshell, you get what you pay for.
It’s clear that IT needs to be invested in – but how much? And what should you be investing in?
According to Gartner, IT spending worldwide will grow this year by 1.1% – doesn’t sound like much, does it? Well, it is – in fact, it will reach a total value of $3.79 trillion.
And can you guess the second-highest component of global IT spending? IT services spending grew by 5.5% since last year and will grow another 3.5% to next year, second only to enterprise software spending.
Long story short – you need to invest in IT support.
What Type Of IT Support Should You Invest In?
Many businesses start out by handling various aspects of their operations in-house, including accounting, marketing, human resources, and information technology. The assumption is that it must cost less to hire one person than it does to hire an entire company.
But that’s not necessarily true.
When it comes to your budget, and specifically, the lines concerning IT expenses, don’t make any assumptions. Find out how the math actually looks when comparing an internal IT staff member to an external IT company…
Internal IT Support
Based on data from PayScale.com, we know that a network technician will cost you somewhere between $30,000 – $71,000 per year. The range is dependent on how experienced the technician is, what types of certifications they have, etc.
However, don’t forget that this number fails to account for costs associated with health benefits, sick pay, vacation time, and annual payroll tax. You also need to provide your employees with space to work, and resources to work with. That’s not to mention whatever amount of time you’ll spend recruiting, interviewing, training and managing this employee on an ongoing basis.
To put it simply: beyond the salary itself, an employee requires you to invest in them with a number of resources. Their annual salary, at the median, is around $50,000 – but how much more will you pay out in benefits, and other expenses that come with employing them directly?
Outsourcing To An IT Company
To start, let’s assume you don’t make the mistake of working with an hourly IT support provider. There’s no need to bother with too much detail, but let’s be clear: being charged by the hour is not the way to go about supporting your IT.
You should be able to find an IT company that will provide support based on a monthly fee. This fee is likely determined by the services provided, the size of your organization, etc. Many IT companies follow a per device model.
An average small business should expect to pay somewhere from $100 – $125 per device per month. Again, that cost can vary – but it can still come in much lower than the $50,000 per year you would spend on a single employee.
Don’t forget that with an IT company, your relatively small monthly fee means you don’t have to pay for employee vacation time, sick days and other expenses that come with directly employing an IT staff.
Furthermore, working with an IT company will grant you access to additional services when compared to an internal staff. Whereas your own IT team will likely spend most of their time addressing support tickets and maintaining systems, you can find an outsourced IT company that offers a lot more.
ARCIS Technology Group delivers the following (and more) to our growing network of clients:
- Enterprise Cybersecurity Solutions
Working with ARCIS Technology Group offers you access to cybersecurity technologies and best practices that are often limited to enterprise organizations. Whereas affording enterprise anti-virus solutions, advanced email security software, and end-user awareness training would be cost-prohibitive on an independent basis, doing so with ARCIS is much more cost-effective.
- Robust Disaster Recovery
Similarly, the monthly fee you pay for our services provides you with a much more capable and secure disaster recovery system. The data backup solutions and business continuity processes we implement for our clients keep their data protected against a range of common threats.
- Big Picture Support
With your own IT team, much of the budgeting and vendor management will still be left to those managing your organization. With ARCIS Technology Group as your partner in IT support, you can offload these tasks to our team, putting our experience and resources to work for you, and allowing you to focus on your work instead.
What Else Should Your IT Budget Account For?
Your IT budget should account for a number of categories depending on the complexity of your operations and the extent of your requirements. Here’s a very basic example of some of the categories you should consider:
- Hardware: computers, servers, laptops, tablets, smartphones, network infrastructure, cabling, IP phones, video surveillance cameras, maintenance contracts, etc.
- Software: licenses, subscriptions, support, maintenance contracts
- Projects: IT consulting expenses, hardware, software, dedicated staff, cybersecurity training
3 Tips For IT Budgeting
1. Align your IT budget with your organization’s strategy.
If you don’t have an IT strategy, you should ask your IT company to help you design one. At the very least, develop a basic strategy that you can use as the basis for your IT budget.
2. Consider all levels of your organization.
Set aside the time and effort it takes to create a holistic and comprehensive budget. It will be the financial manifestation of your overall IT strategy and direction over the coming year. Use it to compare budgets year after year. Once IT initiatives have been determined and incorporated into your budget, take a step back from the details and look at the big picture.
3. Assess the impacts of your IT budgeting for the long term.
Several months before your budget is due to be approved, review last year’s budget and this year’s expenses. This will help you detect areas where you need to reduce costs or reallocate them. You can cut the “fat” from your budget in one area (like hardware purchases or software licenses) that you can apply to a more cost-effective resource (like Hardware-as-a-Service or Software-as-a-Service).
You shouldn’t think of IT budgeting as having a start and finish. It’s an ongoing process with a series of do’s and don’ts. No budget is 100% correct, and if you run into obstacles you should modify your budget.
Budgets are often modified after they are prepared as we discover things we didn’t know before. You must find what works, what doesn’t and make adjustments along the way. Your IT budget will go through cycles as your business needs grow and change, and as the opportunity to take advantage of new, innovative technologies emerges.
That said, are you looking for expert assistance with your IT budgeting?
ARCIS Technology Group will help you develop an IT budget that takes your customer and employee needs, and your business goals into account to make sure that your IT can always support the changes your company undergoes well into the future.