Outsourced IT Support vs In-house Support Team (part 1)

As businesses that use any sort of IT expand, they inevitably use more technology during this growth. The purchasing of hardware such as PCs, and servers and the inevitable increase in software installed by users means that it can become a challenge to manage once you reach a particular number of users and desktops.

Once you reach this point, a decision must be made to either outsource your IT support requirements or employ someone to fill this role.  Likewise, you may be considering cost cutting within the business and see outsourcing the IT support function as an option.

Here are a few pro’s and con’s of each approach, reflected in both cost and service delivery.

Based on a small support team to provide support upto 50 staff:

In house Support Costs (based on a typical 2 man support team)

Description                              Cost (per annum)

Support Team Leader            £23,000

Support Assistance                 £15,000

Total                                          £38,000

Plus Employer contributions £4,180

Grand Total per Annum        £42,180

This works out at around £840 per employee per year to offer IT support to them or about £2.30 per day per employee.

IT Support – hidden bottom line benefits

Now, obviously, support isnt just about cost – the critical part is the service delivery of IT Support, and what value this adds to a business. In the most rudimentry terms, IT support ensures business related services remain available as much as possible.  If equipment fails, or employees are unable to work, then this means time and money is lost.  Many would say that it’s impossible to put a financial figure on the “value” added by IT support.  I’d disagree – the following is an example showing how cost and time can be interpreted to show what real bottom line value IT support can give to a business.

IT Support Costing Example

On a business with 50 employees, with an average salary of say £20,000 per annum this would mean an annual profit of around £1m just to pay the overhead of the salary. With a business in the service sector delivering 50% GP, this would mean it would need an overall turnover of probably £2m-£3m+.

This £3m turnover, delivered over a year would equate to £8200 a day or £1000 per hour on an 8 hour day.  Split between 50 employees, this would mean a loss of around £50 per hour for every hour lost due to equipment or software not functioning correctly.

Now, if you already have an IT Support team in place, and they record their work time via a ticketing system or time-sheets it should be possible to record the “downtime” of systems per day.  If an infrastructure provides 90% availability of services, then this would mean around 5 support calls based on the above information… i.e.  1 in 10 employees raise a call that equates to 1 hour downtime each per day.

This means that 5 support calls, each costing 1 hour (£50) in time would mean the business losing £250 per day in employee downtime.  This equates to an amazingly high figure of £91,250 over 1 year.

By outsourcing the IT service, it could be possible to improve the service to say 95% availability. This would mean a saving of £45,625 a year in downtime alone, along with the employee savings of £42,180. A total bottom line saving to the business of £87,805 per year before contract costs.

Of course, you don’t have to outsource to improve service levels, but often these are built into support contracts which make it easier for customers to dictate improvement requests.

A typical support contract for 50 PCs could cost around £2000 per month or £24000 per year. This is almost half the cost of an in-house IT support team.

It’s important to note that this only really covers the costing side of the support. The actual delivery of the services will be visited next…

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