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The Hidden Costs of Poor IT Management

March 22th, 2018

When choosing the best IT support solution for your business, it might feel like the decision primarily comes down to budget: can we or can’t we afford dedicated IT support? But it’s not nearly that simple anymore, because while NOT investing in IT support may feel like a cost-savings, there are many hidden costs that also need to be considered.

Here is an overview of what’s driving the hidden costs of poor IT management, and just how costly they can be.

Unplanned/Unbudgeted Repairs

Unplanned Computer Repairs.jpgThe most obvious cost factor for any business that relies on technology (which is now everyone) – but isn’t relying on dedicated IT support - are the repair costs.  Because like it or not, when you use technology it inevitably breaks down and needs to be fixed.

This traditional “break-fix” model might have worked a few decades ago when businesses weren’t nearly as dependent on technology for, well, everything.  But calling an IT professional in for an emergency fix after something breaks isn’t efficient and it certainly isn’t helping you to stay competitive.

The trap here is that may still seem to cost less than either hiring an in-house IT professional or entering into an agreement with an IT firm, but let’s look one level deeper at that assumption.

First, when you hire anyone – a plumber, a mechanic, an HVAC tech, or an IT pro – on an emergency basis, you’re already up against it. 

Maybe you have to pay a higher hourly rate (or maybe you get lucky and you don’t) or you have that 2-hour minimum charge to contend with, even though it only took 15 minutes to resolve.  Either way, while you wait for the fix, you’re out of commission in some way. 

When your technology breaks down, the result is downtime…and downtime means lost productivity, lost sales and even lost customers.

Second, if you’re having various issues fixed only after they occur, you end up treating them as isolated incidents.  And then you risk overlooking or ignoring the real source of the issue.

For example, if you have your “computer guy” coming to the office every other week or so, working on a different piece of hardware each time, what you’re not getting is a 360-degree, strategic view of your network that would reveal the root problem.

So now you’ve applied a bandage and gotten your sales team back to work, but how long until it happens again?  Because the underlying issue will manifest itself again, resulting in more downtime, and another costly onsite repair. 

Wash. Rinse. Repeat. 

(Whereas if you evaluated and treated it at the source - with a Managed IT solution - you could make sure it stops happening at all!)

Hidden costs of poor IT budget.jpgThird, are you really saving money, or does it just feel that way because you aren’t committing upfront to a monthly investment? 

If you can’t predict what’s going to break when, then there really is no way to budget for what you’re going to be spending.  It could be less than you thought, but it also could be a whole lot more.  And even if it is the latter, you still have to pay it in order to get back to business.

More than likely you’re not saving a significant amount of money, but what you are doing is giving up any control over the timing of the expenses and how the money gets utilized. 

Maybe there’s a month where you don’t have any IT expenses, but quite possibly there are a few others where it’s triple or quadruple what you “expected”. Those fluctuations are difficult to manage from a cash-flow perspective, and provide no guidance or useful fiscal insights for the future.

But even worse, you’re spending that money just to patch things up, not to make meaningful upgrades or improvements.  What you’ll likely find is that for the same investment, you could get better security, more uptime and valuable upgrades.

RELATED:  Proactive vs. Reactive IT Management

RELATED: Understand the Managed IT Services Model and Why It Works

Inability to Upgrade

Older technology can cost you in a variety of ways.

First, it slows down – and frustrates -- your team. 

Recycling_Blog_post_image.jpgTrying to eek out another 6 or 12 months might seem like the safe bet, but not only is this slowing you down and creating a stressful environment, it is more than likely also preventing you from utilizing newer, better features that are only available on a modern network.

You can’t run Windows XP and expect your team to be able to seamlessly and securely share files while working from anywhere! 

Over time, all hardware needs to be replaced for both security and performance reasons.  And the hidden cost to your team if you aren’t providing them with modern tools and apps is lost time and maybe even lost opportunities. 

With reliable, professional IT Management you get a partner that will work with you to plan ahead, keep your technology up-to-date, and stay competitive using all the modern tools available to you.

On the flip side, poor IT management costs you time, employee morale, and ultimately erodes the value that you bring to the table for customers and results in customer churn.  Because if you can’t meet the modern consumer’s demands due to your outdated technology, they’ll move on to a business that can.

RELATED:  The Risky Business of Outdated Technology

Damaged Reputation from a Security Breach

Damage to Reputation to due poor IT management.jpgEvery business is at risk from today’s cyber-threats.  (Yes, even yours.)

And while there is no guarantee ever against falling victim to one – largely based on the fact that human beings are involved – you can certainly plan for one NOW so that your response and remediation are already established.

But if your IT management is poor, so is your security.  Poor security means you’re even more vulnerable to a breach, and more than likely, that you also lack a comprehensive disaster recovery plan.

All of this will cost you.

It will cost you time and money (lost productivity, lost sales, etc.) while you try to recover from a security incident, it will cost you money to repair/remediate/restore, and it will cost you customer trust and loyalty due to your damaged reputation.  The longer it goes on and/or the worse the breach, the more trust you lose…priceless trust that may never be rebuilt.

While some of these actual costs are difficult to calculate and will vary, you can use data to get an idea of the costs of a data loss event.  Check out this worksheet to find out what it would cost your business.

WORKSHEET: Calculating the Hidden Costs of Data Loss

RELATED: The Real Cost of Data Loss is More Expensive Than You Think

It’s a Barrier to Productivity

Poor IT Management Barrier to Productivity.jpgStaying competitive in business today means maximizing any – and every – advantage you can. Modern technology can provide a major productivity boost to your operations, your team, and your customer interface.

However, poor IT management can also be one of your biggest productivity killers.

And when it comes to keeping pace with modern technology, if you don’t have a skilled IT team running point on this, you’re missing out on making the most of tools that can help your staff to work smarter, stay flexible, and provide the service level that the modern customer has come to expect.

And don’t forget the frustration and stress that is created when your technology doesn’t perform well – it might seem benign, but it can feed into a lack of motivation and culture of negativity that prevents your team from working at high levels.  This is particularly troublesome for remote team members or employees who are on the road a lot.

RELATED: 5 Technology Priorities for 2018

Paying for Services or Products You Can’t Use/Don’t Benefit From

Wasted Money on Poor IT Management.jpgThe innovations in technology are both a blessing and a curse.  On the one hand, there is so much amazing technology out there!

But on the other hand…there is so much amazing technology out there…so how do I know what will work best for me?!

Just because it exists doesn’t mean it’s right for your business, and it’s unwise to try to implement new technologies without having done due diligence to understand it and answer the right questions first.

For example:

  • Will using this new cloud service present any compliancy issues for my business?
  • Is it secure?
  • What kind of support does the vendor offer?
  • Is it compatible with my existing network configuration?
  • Is there another similar product that is better suited or at a more attractive price point?
  • Do I already have this same functionality within another tool and I just don’t know it?
  • Am I paying for way more than what I actually need or will ever use?

Every carpenter knows the saying “Measure Twice, Cut Once” and it’s a great analogy for implementing new technologies as well.

Without an experienced IT professional advising you, it can be tempting to jump on the latest technology innovation; but if you don't have the expertise required to "measure twice", you could easily end up with a product that doesn't work for you.

RELATED CASE STUDY:  How 1 Smart Law Firm Turn IT Lemons Into Lemonade

The bottom line for every business is that you simply can’t afford poor IT management – it’s costing you a lot more than you may think as a result of lost time, lost opportunities, and erosion of the value that you offer your customer base.

The good news is that outsourced IT solutions offer modern businesses a turn-key solution at a fraction of the cost of building an in-house IT Department.  To learn more about the benefits of a Managed IT Service plan, click here

RELATED: 5 Ways a Managed IT Services Solution Will Make Your Life Easier

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