The discussion of IT maintenance costs is a big one in the IT world. Marty Kaufman, President and owner of Accent Computer Solutions, Inc., travels all over Southern California consulting with executives about IT and IT Department performance.
Marty is very familiar with the frustrations of investing large sums of money into IT, and the woes of not getting the kinds of results that were expected. To combat this feeling of loss, Marty helps CFOs understand the different types of IT costs. He categorizes the costs accordingly and helps them figure out what their IT maintenance costs should be.
While there is no surefire way to pinpoint the exact dollar amount for your IT maintenance, here are a few ways to estimate the costs and keep your budget on track.
Breaking Down IT Costs into Categories
IT usually gets lumped into one broad category. When CFOs crunch the numbers, there's almost always confusion about how they could have spent SO much on IT. At this point, you need to dig deeper into your numbers and create some categories.
Your spreadsheet could have categories such as hardware, software licenses, Internet, warranties, upgrades, etc. This list can get specific to your company. Work with your IT department or managed IT services provider to break down the right cost categories for you.
To really understand where your money is going, categorizing IT support costs can be very valuable.
- Projects – Any upgrades or additional hardware/software
- Help Desk / End-User Support – This includes the cost of the vendor AND the cost of an employee spending time dealing with IT issues instead of working
- IT Maintenance – This area left out of most forecasts. And yet it’s your greatest asset to prevent additional costs. This is network administration, patch management, backups, disaster recovery, etc. All the regular maintenance tasks that must be done to keep everything running smoothly
Breaking down costs by category is the only way to truly forecast expenditure. Perhaps last year was the year a lot of workstations needed to be replaced, or it was the year that your company upgraded by purchasing tablet devices for all C-levels.
If costs are lumped together, your IT services fees might look outrageous. When in reality, a project increased costs for the year.
The goals of projects are to standardize and improve your system environment so that there are fewer failures. With the right maintenance routine, the lifespan of your technology can be extended. The cost of IT maintenance is going toward productivity. By removing all issues, people can work instead of being on the phone with IT.
Looking at last year’s numbers can give you a jumping-off point for creating an estimate. In some cases, you’ll know you can spend more; in others where you need to dial back.
Reminder: Keep Growth in Mind When Forecasting IT Costs
Sometimes things cost more, and it’s a good thing. How much did your company grow last year? What are your company’s plans for growth in the coming year? More users equal more data. More data equals additional storage, which costs more. If executives are concerned with rising IT costs, looking at recent growth and planned growth could help factor in and explain future costs and current price surges.
How to Structure Your IT Costs
Now that your list and cost breakdown has been formulated, creating a list of needs vs. wants is the next step. This list can be as lean or as large as you want it to be – just because it made the list doesn’t mean that it’ll make the final cut.
Your managed IT service provider is a great person to help you figure out the needs of your company. Ask them to do an assessment of your current system. What kind of upgrades do they suggest, what things are urgent, which still have some time?
They should help you find a happy medium between your needs and your budget.
Are You Investing in the RIGHT IT for Your Business?
A good investment when it comes to your IT can sometimes be hindsight. In our consumer-based culture, wanting the latest and greatest can hinder growth. Your technology should serve its purpose, but also be cost-effective. The total cost of ownership includes yearly maintenance of the product. There is a balance between maintaining productivity and keeping the cost at a manageable level.
IT costs can be very confusing to figure out, much less compare. Breaking down your cost into categories and digging into the root of the expense can go a long way. Understanding how your IT investment can give you a competitive advantage. Set up a meeting with your IT team today, communicate your fears, and check that everything is in line with industry standards.