Turn Down the Noise! (Part 1)

Dan Bremner

As much as I would love to say that Castema’s Managed IT service is the perfect solution for every small business, the reality is that some businesses need the value that Managed IT gives them more than others do.  I’m going to break this post into two parts in order to give a complete answer to the question, “Who is a good customer for Managed IT?”  Today I’ll introduce the concept of two types of support costs, and explain them, as well as define a new Natural Law pertaining to Information Technology support. Next time, I’ll talk about hotels and how they relate to IT Support business models (trust me), and what that means to your IT support cost.

So, who is a good customer for Managed IT?  Sure, everyone wants their computers to run well, their critical business information to be secure and protected, and their systems to stay virus-free. No argument there. (Right?)  But what makes the investment in Managed IT worth the seemingly higher cost to a company?  To understand that, we first need to understand the two costs of technology support.  

Two Costs of IT Support

To support and maintain a business’s computer and network infrastructure, there are always TWO costs, the direct cost and the hidden cost. As I will discuss later, lowering the price you pay your IT vendor doesn’t reduce the overall cost, all it does is shift more of the cost from the direct side to the hidden side.  This is known as The Law of Conservation of IT Support Costs (well, now that I’ve given it that name, it is), which states that in supporting a network of a given size and complexity, the overall support cost can be transferred between hidden and direct costs, but the overall cost cannot be reduced simply by lowering the price.

So what are these costs?  The direct cost is obvious; it’s the check you write to your IT support company. But the hidden cost can actually be more expensive than the direct cost, and the worst part is that most business owners aren’t even aware of it. (Hint: that’s because it’s HIDDEN).  Truly, when your employee picks up the phone to call your IT vendor, it’s costing you more in hidden costs than the check you’re going to write to them. Don’t believe me? Let’s look at an example.

Kathy is working on a spreadsheet, or entering billing information into QuickBooks, or processing a customer’s order. The application she’s working in locks up on her, and she loses the last 15 minutes of her work. She reboots the PC and logs back in, there goes another 10 minutes, and add a few more minutes because she got distracted while the PC was booting and started talking with Susan about last night’s Blackhawks game, so add another 5 minutes for each of them, plus another 5-10 minutes to get back into “the zone” or flow state that she was in while she was processing those orders and humming along before that PC lockup. Now imagine that’s the third time this week this has happened to Kathy, not to mention that time last week that the server was acting “funny” so it had to be rebooted in the middle of the day, knocking EVERYBODY out of the system for 20 minutes. Now imagine what this is doing, subtly, to Kathy’s attitude when she comes into work, wondering not if, but when, her PC is going to act up on her again. Is she perhaps a little more “on edge”, a little less productive? Does her attitude rub off on her coworkers? Does she have to bring work home because she can’t get it all done at work? Does that keep her from spending time with her kids at night, which makes her feel guilty, which makes her resent her job, her PC or even (gasp!) her boss? I know people who have changed jobs who have cited slow and oft-crashing computers as being a big factor in their frustration with their previous job. How much will it cost you to train Kathy’s replacement?

Am I taking this to an extreme to make a point? Sure, maybe. But now let’s add the typical pay-by-the-hour, break-fix IT support company into this scenario. At the third lock-up, Kathy decides to call these guys, because now it’s “serious enough” to call.  (Everyone at Kathy’s company knows you don’t call the IT guys unless it’s serious, because every time you call it costs money.) We’re going to assume the best-case scenario, that this company is responsive and good at what they do. They’re able to quickly determine that a Windows patch from Microsoft has been released and will resolve the issue, and they install it and send you the bill.  Here’s the problem: before Kathy even called, this issue zapped somewhere between $70 - $100 of directly measurable productivity losses, plus her time on the phone with the IT vendor and time away from her PC while they did their troubleshooting, and who knows how much more in terms of her job frustration. Those are the hidden costs of IT support.

Little, nagging problems added together = NOISE

Here’s the bigger problem: Next week, or the week after, someone else will have a different issue, and this cycle repeats itself. Maybe next time a sales handout won’t print to the high-speed network copier so your sales rep is late to a customer appointment, or your customer service manager misses an angry email from a customer because her iPhone mysteriously stopped syncing emails.  This is what we refer to as the “Noise Factor”.  Noise is what we call all these little IT problems that don’t seem too serious taken individually, but together they sap the lifeblood of your company – your people’s productivity.

Remember, we’re talking about a best-case scenario here: your IT support company responds every time you call, they’re friendly, they’re polite, and they know what they’re doing, so they are able to resolve these problems when they occur. So that’s good, right? But somehow, the Noise keeps coming back. Why? Well, what if I told you it’s because THEY have the wrong business model, and because YOU aren’t paying them enough. WHAT?

That’s right, pay more for IT support and actually reduce your overall cost. Find out more in Part 2 next month.

 

Dan Bremner is the founder and president of Castema Technology Services, which has been serving the small business community in Chicago and its suburbs since 2002, making businesses successful by keeping networks running and employees productive.