How much does IT support cost?
Is your company in the business of technology? In the 21st century, we’d contend that every business is a technology business. In that vein, we should look at how supporting our entire workforce affects our ability to do work, and what the true cost of technology support means for our ability to succeed.
Framework has operated as a Managed Services provider in the Chicagoland area for over a decade. We’ve seen our business change alongside the market and understand roughly what our competitors charge.
This article will serve to explain the typical cost constructs for IT support and services. In order for you to understand how to plan for IT support, the costs provided are intended to be budgetary for the market at large. Our goal with this article is to allow you to understand what costs you can expect with IT support. This should help guide you to make a well-informed decision about IT support and your business.
There are several components that impact the cost to an ITSP/MSP relationship:
- Help desk support
- IT projects, project management and migrations
- Hardware, software and other product resale
Help Desk Support Costs
Cue the Jaws music….. There’s a terrifying shark lurking beneath the waters of your productivity…
Are your employees wasting time and energy trying to solve technology problems?
That doesn’t scare you?
Are you sure?
Maybe a little?
Not like a Megalodon coming to eat your friends and family?
Ok, that’s fair. Even if it isn’t a matter of life and death, fixing issues related to networks, server infrastructure, passwords and printing will take you away from what it is you do best. Luckily for you, there’s an entire industry built around taking these tasks and fixing them quickly. A support desk is made available by IT support partners that you can call, chat or email at any time of day. This loops you in directly with an engineer that can support you.
The cost basis for individual MSP’s vary as widely as the companies themselves do. There are multitudes of one-and-two man shops that provide IT support for a number of clients. On the other end, there are plenty of large companies focused on outsourced managed services, both onshore and globally. There’s no hard and fast rule for which size and style of provider will be the best fit, but you can learn about the basics of an MSP and what questions to ask in some of our other blogs.
Cost structures will come in a few ways: monthly retainers for support, flat rate support, or one-time costs billed hourly.
- Monthly retainers typically start around $1000 per month and will encompass the first 8-10 hours of support per company. Additional hours or blocks of hours are typically sold at a discounted rate. $125-250 per hour is normal, depending on the qualifications of the provider and the complexity of the environment.
- Flat rate support traditionally gets billed on a per user, per machine or server, or blended basis. In the Chicago market, we see rates between $75 and $150 per user per month for companies below 100 users, and between $50 and 150 per user or element per month for companies above 100 users.
- One-time costs are referred to as break/fix, where an IT provider is called upon in an emergency or time of need. We don’t recommend this. If you choose to go this route, you can expect to pay between $100 and $300 per hour, and you’ll be subject to the availability of your on call provider.
IT Projects, Project Management and Consulting
In addition to supporting your currently deployed technology, your business is going to want to add new technology, refresh your hardware or implement a new software. There are several specialized vendors with the processes and workplace talent to guide your business through nuanced technology rollouts such as CRM’s, ERP’s and web development.
Though we recommend involving your ITSP or MSP in any conversation with a technology vendor, oftentimes we will refer this type of work to a firm with more specific domain expertise. The project work a typical MSP handles usually relates to the assets they support, like desktops, servers and network infrastructure.
You may ask yourself, why isn’t this covered in our service agreement? Some companies may include projects up to a certain size or scope in their monthly offering, or even include all projects. This often works out in the providers favor, and not the clients. Projects tend to arise infrequently, and though a good vCIO or consultant can help to project some of them, they will invariably pop up unexpectedly. If you’re paying for unlimited project support, you’re essentially paying your vendor insurance against any unexpected labor cost.
Instead, you can anticipate paying for projects in addition to your established monthly fee or retainer. Projects are usually billed on a per hour or flat rate basis, not unlike many professional services engagements. While it would be impossible to ballpark a project cost, because each objective is very different, a typical hourly engagement is broken down by tiers.
- Tier 1 (Entry Level Engineer) project: $90-140 per hour
- Tier 2 (Mid-Level Engineer) project: $110-175 per hour
- Tier 3 (Highest Level Engineer) project: $200-300 per hour
Hardware, Software or Other Product Resale
A good MSP should be your first thought when you look to adopt new technology. In a healthy relationship, they’ll be the ones deploying or supporting your purchase. At the very least, you’ll want them informed about the impact it will have on your environment. They should also have a process that’s established and communicated for how they make recommendations, and if they have an incentive to do so.
There are a few schools of thought in the MSP community regarding selling products and receiving commissions for things like desktops, VoIP, network infrastructure, and so on. Some providers think it is best to remain impartial, and to allow clients to search for and select whatever asset at the best cost possible. Others think it is best to sell everything they can to a client, so that they can control the customer experience and have full transparency into the assets they’re supporting.
At Framework IT, we believe that the world of IT hardware is extremely competitive and many products are commodities accessible through many vendors. If your MSP wants to sell you products, check their cost against market rates. If there’s a difference, ask them why. Often times, there can be value in paying a bit more to get the right product delivered correctly to your environment. A good MSP should be able to deliver the same quality of service on a computer you bought from them as one you bought off of Amazon.
How Framework Prices Differently
We believe being fair and adding value is the best way to build a lasting business. We decided to align our fee structure with our costs, and to give incentives for our clients to do the right thing for their business.
In general, it costs us more time and money to support an unhealthy environment than it does to support one that’s outfitted with the best practices. Through hundreds of client engagements, we’ve found that there are a number of indicators that define the overall health and structure of an IT environment. We developed a scorecard that our clients and prospects can take to determine where they fall on that continuum. No business is perfect and each environment has reasons and rationale for how it was set up. In general though, a business that fits into our IT Best Practices tends to have less technology issues than one further down our grading scale.
In every client engagement, we develop a customer journey that details the baseline of the IT environment. Our gap analysis helps to provide best practices and a path for that client to achieve them. We then present the anticipated timelines and costs associated with that journey. And finally, we reduce our costs to support that environment based upon the customer commitment to best practices.
We believe that we should reward our clients for doing the right thing, because if the IT environment is healthier, so are our agreements. We’ve created this scorecard to allow our clients to see where they fall in our best practice alignment. We encourage you to take our scorecard and find out how much you could save by making your business better. We’d be happy to share in that reward with you.