If you are considering working with an outside IT service provider, you’ve probably noticed that there are a variety of options. If you’re already in the decision-making process, you may be wondering how something that seems to be similar can vary so widely in cost.
At Kelser, we hear this question a lot. (Don’t worry, I’m not here to sell you on working with our company, just to give you the information you need.) I’ll explain the mystery.
In this article, I’ll outline important factors that come into play. I’ll explain which ones matter and why. Armed with this information, you’ll be able to confidently make a buying decision that works best for your organization.
With IT support, as with many things in life, it’s important to know what you are paying for. It’s equally important to know what’s not included.
For example, some IT providers may cover your printers; others won’t. Some may provide unlimited calls to the service (or help) desk, some may not. Know what your agreement covers and what is most important to your organization. If you have an older infrastructure, unlimited calls to the service desk may be a priority. Know when to expect remote vs. on-site service.
10 Factors That Affect IT Support Costs
There are many factors that affect IT support costs.
1. IT Support Models
There are two common IT support models: break/fix and managed IT.
What Is Break/Fix?
Break/Fix IT support is an agreement that a provider will come and fix things that break. It’s straightforward. The arrangement may be retainer-based or issue-based. Cost, which varies depending on the issue and provider, is incurred when the service is used.
Since service is often performed in response to an emergency that has created a work stoppage, the “per call” cost is typically pricey. Budgeting can be tricky because you never know what will break and how much the fix will cost.
What Is Managed IT?
Managed IT is a proactive and strategic approach to IT. Customers pay a predictable, monthly recurring fee that varies from provider to provider. This monthly fee typically covers strategic advice, short- and long-term planning, licensing fees, and proactive maintenance.
There are two options within managed IT: fully managed or co-managed. As the names imply, some organizations want the IT provider to partner with their on-site staff. Other organizations have no IT staff and contract with an IT provider to take on the entirety of their IT function. Understandably, this distinction has significant cost implications.
2. Organization Size
When it comes to IT support, the size of the organization encompasses multiple factors.
Number of Devices and/or Users
A big factor that affects IT support costs is the number of users (or devices) being supported.
Number of Sites
Supporting one physical location is much simpler than supporting multiple locations. If all users are physically located at one site, the cost will likely be less than several sites or a largely remote workforce.
In the same way, if an organization’s physical location is near the IT provider, the customer may have a cost advantage due to proximity.
3. Licensing Fees (Software)
Licensing fees are proportional to the number of users in an organization. Having said that though, there will be some applications that every user doesn’t need, so every organization’s licensing fees will be different. In some cases, large organizations will receive a volume discount which will drive down the per-user cost.
4. Service Support
There are a couple of factors that fall into the category of service support.
Help Desk
Some IT support contracts provide for unlimited calls to the service (or help) desk. Other IT providers charge per call, while others cover a certain number of calls within the contract and then charge separately for each call beyond that.
On-site vs. Remote
Providers can often remote into a user's device to troubleshoot and resolve issues. This ability can affect the cost of your service. Make sure you and your users understand the kinds of issues that will be handled remotely and those that will require on-site service.
5. Team Experience/Expertise
The level of experience and expertise of the provider’s staff will play a role in their pricing. If one price is significantly less than another, make sure you ask about the experience level of the staff. For example, a solid senior-level engineer with current certifications and relevant experience can earn a six-figure salary.
Understand the level of experience and expertise of the provider. While you may save a few dollars with a less experienced provider, you want to know that the people caring for your IT have up-to-date skills and certifications as well as the experience to be able to troubleshoot your issues.
6. Infrastructure (servers, switches, and more)
The nature of your infrastructure also can affect cost.
Services
The services the provider will need to deliver to keep your IT infrastructure available, secure and efficient also contribute to the cost of external IT support.
Age
Just as the owner of a vintage car will need to factor repair costs into their budget, infrastructure age will affect the cost of IT support. The provider also may recommend upgrades that can typically be included in long-term budgetary planning.
Complexity
To continue the car analogy, certain cars are more expensive to maintain because of the complexity of their engine. The same is true for IT infrastructures.
On-premise vs.Cloud
On-premise servers require different kinds of maintenance than cloud-based services. With on-premise servers there will likely be a need for more site visits, increasing IT service costs.
7. Turnaround Time (Service Licensing Agreement)
Turnaround time for help and service is another factor. A provider whose reputation is built on faster service commitments may charge a premium.
8. Intermediary Support With Original Equipment Manufacturers
Some providers have ongoing relationships with equipment suppliers and will run interference for you. If something breaks, the IT provider will serve as your liaison and contact the OEM on your behalf.
9. Proactive, Strategic Support
You also want to know that the people who work at your IT service provider have the experience to provide the strategic advice that will position your IT infrastructure to support your short- and long-term goals. Some providers offer the services of a virtual Chief Information Officer, Technical Alignment Manager, and Service Delivery Manager.
These experts come with more cost, but also offer significant benefits. Make sure that if your provider says they offer these services you understand how much strategic advice you can expect.
10. Industry
Some industries have more regulatory and compliance requirements. These, too, figure into the cost of external IT support.
Whether the requirements are designed to protect customer data (health information, private identification data, or credit card numbers for example) or contract requirements (for government agencies like the Department of Defense), these can make IT support a little more complicated, so there may be additional costs.
What To Expect When It Comes To IT Support Costs
Now you know 10 important factors that will influence your IT support costs:
- IT support models
- Organization Size
- Licensing Fees
- Service Support
- Team Experience/Expertise
- Infrastructure
- Turnaround Time
- Intermediary Support With OEMs
- Proactive, Strategic Support
- Industry
This information will help you compare IT support proposals and will make you a more informed consumer. Nobody likes to enter a negotiation feeling like the other side has the upper hand. By reading this article, you have leveled the playing field.
So, what’s the next step?
If you are in the early stages of deciding which support model is best for your organization, read this article: IT Break/Fix vs. MSP: Cost, Reliability, Security, Productivity.
For those of you who are evaluating managed IT service proposals, check out this article to find out the top questions you need to ask: Questions To Ask Before Signing With An IT Managed Services Provider.
Whether you end up working with a break/fix provider or a managed services provider, Kelser believes in providing the information you need to make this important decision. We know managed IT isn't right for everyone, but if you are wondering if it makes sense for you, take the quiz below.
