3 Reasons Why Paying for IT by the hour is bad for your company

For most of my 30 year career in the IT space I have seen the argument for and against outsourcing IT help.

I have been in both places either as a hired gun, or dedicated employee and can see the arguments from both side.

Even the MSP space is getting crowded as more of the jobber/hourly types see the benefit to being an MSP.

But what I am not seeing in the MSP space today is the argument against hourly paid providers, and why if your a medium to small business you may actually be hurting yourself if you do choose the hourly IT guy instead of the all inclusive MSP.

So lets discuss the 3 reasons I see for this side of the argument.

1.) Responsiveness.

As a customer whos company needs their IT to work in order to accomplish your goals the issue you will find when you deal with hourly IT people/companies is responsiveness. Or to be exact a lack of responsiveness.

Why?

Hourly IT people get paid by the number of billable hours that will fluctuate wildly per month. So you cannot hire and staff up as needed because the next week you may not get enough billables to cover the payroll. So these tend to be 1 man shops or jobbers and one project can take them out of play for weeks.

But as a MSP with a fixed price all you can eat model you can staff up based upon number of endpoints managed and put processes and people in place to always be available.

2.) Cost

Hourly IT seems like a good idea up front but when your paying a company by the hour they are going to milk the hours as much as they can. They do not have any incentive to do otherwise. So that hard drive replacement that should cost you about $500.00 all of a sudden costs you $4000.00. (Do not be shocked I saw this recently from a new customer who showed me the bills from their previous vendor). That 1 bill covers the 800 a month we charge for 5 months and if another drive needs to be replaced they only have the hardware costs to worry about.

3.) Service Level Agreements

What I have seen is the IT guy installs some automated tools, a remote access tool, and anti virus. And then does NOTHING more until you are calling about issues or they have something else to sell you. Unnecessary projects, time consuming upgrades, and unstable systems are the norm for hourly base IT as there is no incentive to make things work or even really manage them.

But an all inclusive MSP like Foris will have an SLA on response time, and time to resolution. And will be more proactive in managing your network that the reactionary hourly guys are. It is to their benefit to get you on track and keep you on track.

I have one of those Hourly IT guys and now your Scared me what can I do?

There is hope as the trend in the industry is to go from ala cart, to buffet style all in one management.

At Foris we offer an all inclusive package in which we manage everything for a flat monthly fee.

The benefits are twofold.

1. ) We are responsible for all everyday upkeep of the entire network including PCs, servers, network equipment, etc. So we can handle issues with vendors etc and can apply standards to all and ensure we are using the latest tools and methods for a stable network environment.
2. ) Even in doing our best to keep things running well things do break or issues arise as it is IT after all. But in the all inclusive model we are motivated to make sure things work correctly all the time. We are motivated to resolve issues quickly and correctly as labor costs affects our profitability not yours.

So as you can see using an all inclusive model allows (you) the customer to budget with a single monthly payment that does not fluctuate much from month to month. You also get the benefit of a company who has as much riding on your networks stability as you do, and who is motivated to make sure it works and actually maintain it using industry standards.

At Foris we pride ourselves on giving our SMB customers industry leading Enterprise level tools and services they would otherwise not be able to afford at a cost that makes sense. And instead of nickel and diming for each service we offer it in and all inclusive model. So as we keep upgrading and adding more to our toolbelt our customer get the benefit without the extra cost.

Alan Basinger CCIE 7145

Founder and CTO Foris LLC.