June 15, 2020

Cost Reduction Series: Episode One – The Value of Outsourcing

Cost Reduction Series: Episode One – The Value of Outsourcing

As the IT space (and business in general) has modernized over the past 20 years, we’ve seen people make a variety of decisions that are understandable, but unnecessary and expensive. Nobody wants to be held responsible for having unsupported, non-redundant systems—so a lot of companies wind up with a pile of unnecessary tools, redundant services, and other avoidable expenses.

Because of this, Attentus will be releasing a four-part series revolving around saving money on your IT solution. This introductory article will be focusing on how outsourcing your IT management (either piecemeal or in its entirety) can save you a lot of money.

The Question

The question we’re aiming to answer for you today is: “how can I save money by outsourcing my IT management?"

In the current environment many companies have been trying to cut costs wherever possible. One of the ways companies are doing this is by cutting their internal IT team down to a single IT manager—but that manager is going to struggle to keep up with all of the technology problems and management needs of today. This is expensive in a variety of ways, on top of being inefficient. The cost of payroll alone is significant, but it goes deeper than that. For the purposes of education, let’s establish a hypothetical scenario:

A company working within a 25 user environment with two or three servers will require an IT manager with a salary around $80,000 per year or more, plus vacation time, benefits, and overtime. That’s a significant amount of money. Compare that to the costs of having an external IT resource, where each of those 25 workstations would cost roughly $100 per month, which winds up being 35-50% of the cost for the same breadth of general management services. That’s before we consider the value of the tools provided by the external IT provider, the value of their support staff, and how those things impact the company’s entire network. The value of those things is hard to calculate, but it’s easy to see that outsourcing the management of this company’s IT can cut their immediate costs in half (or more).

Putting costs aside, what does that one person have to manage? They have to manage the inevitable string of daily helpdesk tasks, they have to manage the servers and network maintenance, and they need to help install tools and services like Office 365. They only have 40 hours in the week to work, unless you want to start factoring in overtime costs, which means that this IT manager likely won’t have enough time to perform other critical functions. When will they manage cybersecurity? When will they have the time to study and improve their craft? When will they have the time and mental bandwidth to work on growth projects? They won’t; they’ll be bogged down with the day-to-day. This is all also assuming that the IT manager in this scenario never takes that vacation, never gets sick, and is always 100% available to work, which just isn’t a reasonable assumption. A single IT manager is physically incapable of managing modern IT needs, through no fault of their own. This is when outsourcing in the form of Co-Managed IT can be helpful; augmenting that IT manager’s efforts with the tools, personnel, and expertise of an external IT provider.

We hope this breakdown and hypothetical scenario has demonstrated the ways outsourcing IT can save money and improve efficiency. It’s important to keep your options open when working with technology, and outsourcing IT can be flexible: you can outsource everything to a dedicated team, or you can split the workload between your existing IT manager and an external resource like Attentus. If you’re interested in outsourcing your IT management needs, or if you have other IT-related questions, feel free to book a meeting and give us a call.

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