Working in IT we get to hear this a lot, “I need to cut our IT costs”, “We are spending too much on IT” etc.
It would be easy cut costs just by keeping old computers running, and not upgrading any hardware. Costs can also be cut by getting cheaper IT support, there are a lot of sole trader/IT support people out there who would change a low hourly rate and just come in when needed. While this would appear on the P&L as a cost reduction, in most cases it won’t translate into a better bottom line, more often than not it will actually reduce profitability.
Here’s why.
PC hardware is quite reliable these days, even 5 year old computers will have very few problems, however old computers are always slower that newer ones, (of similar specs for their generation) and they get slower as they get older, a reinstall may improve performance, but these computers are now being asked to run newer applications that are ever more resource hungry. Old computers just don’t cut it. There is of course a cost with replacing computers, but the speed increase will improve the productivity of the end user, often significantly. Not only can they complete more work in the same time, but they will feel better about their job as they are being given better tools to complete it.
Computer downtime is also an area that can cost a lot of money, reduce it to as close to zero as possible and significant savings can be made. The sole trader may be cheap, but he is one person so can’t be everywhere at once. If someone has a computer problem that stops them working and the computer guy can’t come out there for 2 days, then it’s really costing a lot more than the hourly rate of the IT guy. Managed services companies such as us, will guarantee response times and have a team of IT engineers to cover all eventualities. The support costs are higher; however the increased productivity will usually outweigh the cost of cheap IT support.
Spending money to save money is not a new concept; it’s why we have bought computers for our businesses in the first place, but it’s what happens after the purchase that is more important.
