The Hidden Costs Of Companies Doing Their Own IT

We’ve all seen it, right? The company’s “IT Guy” is the owner. Or a designer who ‘knows a bit about Macs’. This person became the primary go-to person for all things IT in the company. They deal with the bulk of the IT issues and pride themselves on helping out, calling for outside support only in dire needs. Happens all the time. But why? In our many years of supporting Macs, we’ve found that many business owners have fallen into the limiting belief that they are saving money by handling their own IT.

The hidden problem is that the costs of handling your agency’s IT in-house far exceed the perceived benefits. In most cases, this is actually costing your company several thousands of dollars per year. Most business owners calculate the perceived savings by looking at their P&L or balance sheet and seeing nothing on the line for IT services. This overly simplistic view overlooks the soft costs that quickly eclipse the cost of paying for proper IT support. We’ll look at this from four angles - an analysis of the time spent by the person wearing the IT hat, a look at those hidden issues lurking in the shadows, the curse of “the hobbyist”, and the impact of IT on opportunities.

The Myth of “Just Five Minutes”

In many of the companies we work with, a designer or other 'savvy' person was put in charge of IT. Usually the person who knows the most about Macs, they get the extra duty of “IT Guy” - in addition to their regular work. Sounds simple enough. The time he spends dealing with IT mostly involves running updates (Apple, Adobe, etc,) and basic daily troubleshooting. Our experience in working with businesses of all types tells us that this normally takes 1-2 hours per computer per month. So for a staff of 5, these routine tasks take 5-10 hours per month. But we have to add to this the impact of interruptions. Because this person is the go-to for IT issues, everyone in the company is forced to interrupt him whenever there’s an issue. How many times have we heard, “Can you help me out? It’ll just take five minutes.”? Some issues are quickly resolved in only 5 or 10 minutes. But others take more time “Googling around’. And a handful of issues consume hours of time before given up on, at which point outside IT help may be called in. All these little interruptions add up. Research shows that when someone is interrupted, it takes an average of 23 minutes to get back into the groove of what they were doing. So if we’re conservative and look at 20 minutes for one “just five minutes” interruption per day, that adds up to 400 minutes - or almost 7 hours per month. Adding up the two parts of this myth, the person handling IT in a small agency of 5 is actually spending 12-17 hours per month. With a conservative billable rate for a designer of $100 per hour, that’s a loss in billable revenue of $1200-$1700 per month. And if you, the business owner, is the one doing IT the costs multiply quickly as your time is significantly more valuable than that of your staff.

“We’ll just deal with it”

Whenever we’ve taken over IT support for an company who had been doing IT themselves, there’s always a laundry list of issues that had been unreported and eventually surface. When the internal IT person never gets to their issue or the problem keeps coming back, people seldom report the small issues and “just deal with it”. Because of this, when we take over IT support, we coach the staff to tell us about every issue, big or small. Invariably, people step forward with things that have bothered them for a very long time. Let’s break out a calculator and do what I refer to as “CEO Math”. This will allow us to calculate the impact your staff’s productivity has on your company’s bottom line. If people are wasting 10 minutes per day due to spam, calendars, printers, and other niggling issues that they’ve “just dealt with”, that adds up to 200 minutes a month per person. With a 5-person company, that’s 1000 minutes - or 17 hours per month. What is your company’s fully burdened cost (salary + payroll taxes + benefits + etc) per staff member? At a VERY conservative cost of $25 per hour, that is $425 a month - $5100 a year. 

The Curse Of The Hobbyist

Jack of all trades, and master of none. Cliché but true. When a designer or business owner is taking care of IT, unless it’s the thing they do the most, they’ll never develop mastery. They’re a hobbyist. Think about the last time you worked with a client who came to you with work that they did themselves. How did that go? I’ll go out on a limb and assume that these end up being major “cleanup” jobs - if you don’t advise them out-of-hand that it would be better and less expensive for you to just start from a blank canvas. This is because you have developed mastery at what you do. You have dedicated yourself to learning sound concepts and implementing them in a way that delivers results. Developing this mastery takes years and thousands of hours. You will never be able to be able to develop mastery of IT, when it’s one of the many things on your plate. The costs of a hobbyist manning your IT can be huge. The list of things that you don’t know you don’t know is just too long. It can cost you lost data when the ‘automatic’ backup you’d set up stopped working 6 months ago. It can cost you downtime with something that could have been prevented with proactive maintenance. And it can cost you in the re-purchasing of equipment, because even if you have shared your vision, growth plan, etc. with your “IT guy”, he lacks the experience to select and configure solutions that are going to get you to where you want to be. Hobbies are fun, but I don’t want a hobbyist responsible for something that has such a large financial impact on my business. This is why I use an accountant for my taxes - because they are a master of tax law and policy. Your IT should be no different.

The Cost of Opportunity

What activities in your company generate the biggest impact (ROI)? Driving the vision, focus, and direction of the business? Working on the most profitable clients? Cultivating new business? Or is it interrupting these things to take care of a software update or a calendar issue that your staff is experiencing? The final cost is the cost of opportunity. The cost of DIY IT is a lot greater than the 10-15 hours a month that you or your designer is spending on IT. If you had invested this lost time on your highest ROI-generating activities, what would that do for your company’s bottom line? If your staff was more productive, how many more projects could they complete? How many more ideas could they come up with to WOW your clients?