If you want to design a business that’ll last, there are a few core areas that need to be addressed…
- Human Resources—Personnel management, benefits, record keeping
- Accounting—Payroll, collections, procurements, disbursements
- Sales and Marketing—advertising, promotions, networking
- Production—product development, skilled labor, service providers
Ok, got it. But which one of these departments handles Information Technology (IT) and/or cybersecurity?
Too often the answer to that question is:“Yeah…we don’t really have a need or a budget for that,” or “Oh, Jim in HR does that, he helped set up our computers.”
Tacking on “IT manager” to your payroll guy’s title may seem like a great way to save money…until there is an actual IT issue. Would you ask one of your personnel in the field to also balance the company books? I would hope not—they’re not likely to be trained to handle the finances. So why would it be a best practice to assume that any warm body will be capable of managing your network, protecting your data, and keeping an up-to-date back up of your system in the case of unforeseen disasters?
You know what happens when you play with fire…
A little over four years ago, my wife and I were in the process of buying what is now our current house. I remember going room to room, as the notebook in my head rapidly filled with dozens of project ideas. There was just a slight problem: our budget. I was a father of three who had just taken on a mortgage, plus all of the other costs of homeownership.
Nevertheless, I proceeded to take on various projects, after convincing myself that I was a capable plumber, carpenter and electrician. But in retrospect, I severely underestimated the resources needed to do the job right, and the value of my time. Projects took 10 times longer than they should, and corners were definitely cut. In fact, while I was replacing an outlet, I stumbled into a great example of what can happen when you assume you know as much as the professionals…
…You get burned
Turn off the breaker? Check. Verify no power wired to the outlet? Check. Uninstall the existing light switch? ZAP!
It turns out that the switch had been rigged to a separate breaker from the outlet—something a homemade handy-man would never have thought about!
So I should outsource IT because you were fried by a light switch?
It doesn’t matter if your long-term plan is going to unfold at a commercial complex or a cul-de-sac. A successful executive or owner should look at their business with the same eagerness and vision as a prospective homeowner.
Sometimes it takes an unexpected jolt to correct course. Often, you walk away from the situation with a newfound wisdom. In this case, it was the realization that sometimes a situation requires relying on the skills of others in order to get a high quality result.
Does a limited budget create a catch-22?
Any organization using computers to make their staff productive and to process data needs a certain level of skilled oversight to manage that environment. But, not every company is able to afford an IT person on their full-time staff. Companies are able to avoid this paradox with a third option, by outsourcing IT with a managed services provider (MSP). Setting up a consultation can identify areas that may be broken/outdated, increase the efficiency of existing processes, and maybe even free up some money in the budget at the same time.
Removing the hidden costs
Depending on the type of business, a 50-employee operation will typically require one or two dedicated IT staff members. There are obvious costs associated with IT, such as virus protection, software troubleshooting, hardware maintenance and data backups. The cost of these essential services are not the same for all business sizes. The smaller the company, the more you can expect to pay, as highlighted in this 2016 IT Budget survey. In regards to annual IT spending, a company with 2,500 employees is likely to pay about $900 per employee compared to the $1,700 per person being spent by a company with 50 employees.
One explanation for this is that smaller companies will not have the purchasing power to acquire discounted software/hardware. A company with only one IT staff member is also often forced to pay higher salaries, since that one person needs be able to perform the function of a system admin, network admin, security engineer and helpdesk tech. Oh yeah, and they’d likely serve as your chief information officer (CIO) and the strategy table.
A recent study by CompTIA has shown that 93 percent of those who chose an MSP have met or exceeded their cost-saving expectations. MSPs help to level the playing field in IT spending by removing the costs of healthcare, company benefits, training, office space, equipment, and more that can easily amount to $20,000 per year for a single employee.
So, when your business has a need for IT or security services, utilize a company that specializes in just that.
You don’t have to pretend that you, or one of your employees, are also the IT specialist anymore…and you definitely shouldn’t assume that the outlet and the switch are on the same breaker.