Is your business thriving, but your IT infrastructure struggling to keep up? As your company grows, the demands on your IT systems increase, leading to more system downtime, longer support wait times, and rising in-house IT costs. But fear not, there’s a solution.
In this blog post, we’ll delve into the world of IT support costs for small to medium businesses. We’ll explore how these expenses stack up against internally managed IT systems and why investing in proactive support through a Managed Service Provider (MSP) could be the key to avoiding costly reactive measures.
Understanding the true cost of IT support will empower you to make informed decisions about resource allocation, ensuring your business continues to flourish.
How Much Do Businesses Spend on IT Support Costs?
A vital metric for assessing IT spending is the percentage of revenue allocated to it. This figure is calculated by dividing a company’s IT operational costs, including depreciation, by its total revenue.
Research indicates that smaller businesses tend to allocate a higher percentage of their revenue to IT spending. On average, small businesses invest 6.9% of their revenue in information technology, while midsize businesses allocate 4.1%. This encompasses all IT-related costs, from salaries and benefits to services, support contracts, hardware, software, leases, subscriptions, and cybersecurity. As technology becomes increasingly integral to businesses, this percentage is likely to rise.
The most significant cost factor, which can vary widely depending on the organization, is personnel. Salaries and benefits for full-time employees, as well as substantial budgets for consultants and outsourced providers, constitute a major portion of IT support expenses. Full-time support technician salaries can range from $80,000 to over $200,000 when benefits are factored in, making in-house IT support a costly proposition.
Outsourcing your IT needs to a Managed Services Provider (MSP) can slash IT costs by 50% or more. The MSP model has gained global acceptance and is more common in the US than in-house IT support. However, it’s important to note that MSPs offer a different support model. We’ll delve into this comparison shortly.
Read on to discover how outsourcing can revolutionize your IT support cost structure, comparing the expenses of an internal IT support team with those of an MSP.
Outsourcing IT Support Costs vs. In-House Teams
Outsourcing IT support offers a cost-effective solution for businesses of all sizes. However, it’s crucial to understand that it operates on a distinct service model. Instead of relying on in-person or “desk-side” support, users typically interact with a remote support desk and technicians when engaging with an MSP. While most MSPs can escalate support to an onsite visit, when necessary, most inquiries are addressed remotely through phone and remote control. This Managed Services model has proven highly successful and is now a standard approach for small and medium-sized businesses. However, for businesses requiring full-time onsite IT presence, despite the associated expenses, the IT Managed Service model may not be the best choice.
Working with an MSP presents several advantages, along with trade-offs. MSPs boast a broad range of skills, extensive experience, and a deep bench of staff with expertise in various areas. Additionally, they typically offer recommendations, quotes, strategic guidance, security, and project management as part of their standard contract. These services and expertise are challenging to access through a small in-house IT department, let alone a single dedicated IT staff.
By opting for remote support and other services rather than staffing an in-house IT department, you not only save on salaries but also gain access to experts, leading to quicker issue resolution times. Furthermore, the 24/7/365 availability ensures timely assistance for any issues or changes. This approach also helps manage cash flow by allowing you to pay for services as needed, eliminating large upfront costs or ongoing wages with no guaranteed return on investment.
Outsourcing IT support isn’t just financially prudent; it also frees up your employees to focus on other critical areas while still receiving top-notch technical support.
Managing IT Support Costs
With SMB IT spending expected to grow by 6.3% year-over-year in 2023, it’s evident that the need for optimal IT support and infrastructure is here to stay. To harness the benefits of quality service at an affordable cost, consider outsourcing your managed IT support to a trusted MSP like Entre Technology Services. Contact us to receive a free quote today!