Outsourcing is the future!

One of my close friends is looking to employ an IT professional to manage their infrastructure, because his company has two (2) offices and this is becoming hard for their "IT Guru" (ie: the receptionist) to handle all the calls from older users not knowing what to do in any given email, excel or database situation.

In short, my advice to him was not to employ anyone for that type of work.

I know that in the current economic climate that is probably frowned upon - killing a potential boost to the employment sector and any chance of some struggling IT pro getting off the dole and into a job.

This is not the way I see it. I think I may have saved my friend about $40k per year by not employing someone.

Fact of the matter is this job will eventually come into the market, however once it does it will be a safe, secure and long lived position with good pay and a team of like minded individuals to work with.

OK now I know you are wondering what on Earth I am talking about. Let me explain.

I told my mate to outsource to an IT Managed Support Services provider. He knows that is what I do, so he listened intently on what I was trying to tell him.

The main reason that I suggested this to him is not to defend or build up my own business of providing these services. The reason I told him to do this is because it makes plain financial sense to spend money on someone who is there for you 100% of the time you need them, can do the job 100% correctly and is never (never ever ever) going to have a day off.

When you employ someone you run the risk of employing the wrong person, paying too much or not enough, having the person poached by another company, having them fall ill, or just clashing with your personality or that of other workers in your team.

"...you run the risk of employing the wrong person, paying too much ..., having them fall ill, or just clashing..."

Outsourcing is a beautiful thing. You don't have to provide a desk to an outsourced IT professional. You don't need to pay them for holidays, or sick leave, or long service leave - in fact the longer you keep your services with most outsourcing companies like Evolve IT (link at top of page) the cheaper the service becomes per PC as you grow.

Isn't it amazing that this service is available?

This service is available in every industry you can think of, and in most cases business owners look at these services as an extraordinary cost and don't even consider them. However think about things this way:

WHAT ARE YOU ACTUALLY PAYING?

1. How much would you pay for a Network Manager for your business? Avg $60,000pa
2. What is the compulsory super contribution required? $5,400
3. How many holidays is that network manager going to take every year? 4 weeks at $5,538 short term replacement value (includes 20% loading for contractor).
4. How many times will they have a sick day? less than 10 days at the same replacement rate.
5. How many times will they need to employ the services of a specialist? 2-3 times per year at $1500 per day. Let's say 1 week at $1,500 per day - $7,500.
6. Who else in the office also tries to help out the IT guy by fixing the "small" problems around the office? Secretary @ $17 per hour: 3 hours per week - $2,652 pa.

Total you end up spending on IT support: $83,859 pa

Now lets have a look at how much hands-on constructive work is actually done by the IT department.

• Arrive 8:30am
• Boot PC
• Have a coffee
• 9am check emails (and News.com.au)
• 9:30 do first job for day
• 11am morning tea time (1.5 hours work time so far...)
• 11:15 - check news.com.au and facebook.com - check personal email and reply to messenger conversation. Oops - better get back to work...
• 11.45 - next job
• 12:30am - Lunch (45 minutes work time - subtotal 2:15 work hours)
• 1:30pm back from lunch - check news and facebook
• 1:45pm - check emails
• 1:55pm - check job list
• 2:10pm - jobs are prioritised and time to start afternoon shift (50 minutes work time subtotal 3:05 work hours)
• 3pm - afternoon tea - gotta eat to keep the metabolism going
• 3:20 - Check emails - reply to message on facebook or personal email.
• 3:40 - get back to work. (1 hour work time - subtotal 4:05 work hours)
• 5:40 - almost time to go home - check personal email and news.com - rinse coffee cup and go to the loo.
• 5pm - finish

Total actual work time (chargeable to support) - 4:05 hours.

"...Working at this capacity your IT guy is going to cost you $78.67 per hour for your internal support."

Working at this capacity your IT guy is going to cost you $78.67 per hour for your internal support.

Now think of the service that you get internally.

Your lonely IT guy can only do one job at a time. He is employed even when there is no work. He may be understaffed when there is work. There are times when even the most proficient IT guru's need to call in a specialist - then you are paying both of them to do the job.

Now lets look at employing a company like Evolve IT to manage your network and support services.

The service you receive (the service you deserve)

• 20 consultants available for 60 hours per week
• NO down time
• NO toilet breaks
• NO lunch, snack or ciggie breaks
• NO sick leave
• NO holiday leave
• CAN work on multiple jobs for you at the same time
• CAN access specialists instantly
• Account Management to ensure quality
• SLA's to ensure delivery
• Escalation procedures
• Written confirmation of job track at all times
• Patches, anti-virus and maintenance automated
• Quality sessions to ensure consistent delivery of high quality service

So a managed support services company can do the job you would generally employ a $60k internal IT person to do, and usually for less cost and much higher level of service and return on investment.

Let's say - as this is priced dependent on a survey of your actual systems - that we charge this service at $4,000 per month. That is cheaper than an internal IT professional and you are getting guaranteed, high quality service with an Account Manager,service level agreements and access to specialists.

Based on this would you employ the internal IT person?

You should also keep in mind that Support Services companies have specialised software that helps them monitor clients PC's. Most often we have fixed the problem before you know you had one. Most non-IT businesses cannot afford this software because it costs hundreds of thousands of dollars and it's not part of the core business. Therefore many internal network managers are largely flying blind.

I would go for the Managed Support Services any day! For a flat monthly fee you get all the support you need - which is critical for the business when more than one thing has gone wrong - and all of your maintenance and patches are looked after. Plus you have an account manager to liaise with Who ensures you are getting the most from your current IT investments and who will advise you of those one-off enhancements or upgrades that could further improve your business.

"...a win-win... makes everyone happy!"

This is a win-win. By maintaining the customer's network, the support company gets called on less to fix problems, and the customer has improved up time. This would surely make everyone happy!

Oh and now can you see where the job comes from? The more people that go on support contracts with reputable companies like Evolve IT, the more IT professionals get employed into secure, stable and long term support jobs. They are secure and stable because there is a broad customer base that needs to be looked after, and therefore an IT professionals job in a company like this is going to be less reactive to economic and social pressures than one working in specific industries.