Blocks of Hours

Why “Blocks of Time” IT Services Are So Dangerous!

Comments are off

What Are “Blocks of Time” IT Services?

“Blocks of Time” IT Service is an IT support agreement that allows the client to pay for IT support hours upfront at a highly discounted rate.  Subsequently, the more hours the client buys upfront, the cheaper the hourly rate.  In fact, discounts can be quite substantial.

On the surface, it appears to be a viable option for IT support.  However, upon closer examination, it can actually be more dangerous than ad hoc IT support.

Dangers of “Blocks of Time” IT Support

Imagine a situation where you pre-pay a home contractor for 60 hours.  As a result, the contractor agrees to be at your beck-and-call for any home repairs.  However, he makes the same agreement with 20 other homeowners.  A few months later a major storm hits, and you have a leak in your roof.  Therefore, you need help before more damage is done.  Unfortunately, the other nineteen customers also had problems with the storm.  Subsequently, the home contractor does not have enough bandwidth to respond to everyone’s needs in a timely manner.  Such is the danger for clients who buy Blocks of Time IT Support Services.

Interestingly, most industries who ask for payment in advance, do so to cover their out-of-pocket expenses.  However, this is not the case with IT support companies.  They need money when services are rendered to pay their employees.  Likewise, even the on-boarding is paid for by the client at the time of service.

The Risk to the IT Support Provider

Undoubtedly, the biggest challenge for companies who sell “blocks of time” IT support services is the liability of unused hours.  In fact, many of these companies’ hours never expire.  Yet, in the interim, a business must go on as usual.  For example, bills and salaries must be paid.  Therefore, the money could be long gone before the client ever calls in the hours that are owed to them.  For this reason, many of these companies do not stay in business long.

The Client Bares the Cost

The client bears all the burden when they purchase a block of hours.  Unless you want to sue, there is no way to recover your money if the service levels are poor.  Even then, many of these companies file bankruptcy and open their doors under another name.  In one case, I was approached by a company who was owed $32K in unused hours by their IT support provider.  Their provider’s owner got sick and he could not fulfill the agreement.  The client was actually negotiating on his provider’s behalf to buy the company, so they didn’t lose their money.  This wasn’t the first time I came across this situation, nor the last.

In addition, the entire program is reactionary.  This is an issue because these companies cannot staff appropriately for peak times.  In fact, most of the “Block of Time” IT Support companies are small.  For instance, they may have one technically strong engineer and a few entry-level technicians.  As there is not much management oversight since the technically strong engineer is putting out fires and the entry-level engineers are left to their own devices.

Unfortunately, it could take days for a client to get a returned call during peak times of the year. As a consequence to being understaffed, there is very little proactive support.  This leads to viruses, malicious attacks, and festering issues.  In the end, it is a trial by fire environment and the client is the one who pays for it.

Why Companies Choose “Blocks of Time”

Many small- and medium-sized businesses use “Blocks of Time” IT services in an effort to save money and control their cost.  As a matter of fact, you can buy hours for as little as $75.  Obviously, this seems really great on the surface, but it is actually quite dangerous.

Companies that use “Blocks of Time” IT services are at a high risk of viruses, failures, and hacks.  Subsequently, the combination of downtime and excess hours far outweigh the cost of a monthly contract with a reputable company.

A Better Alternative

A better alternative to “Blocks of Time” IT services, is INSI’s managed services or customized IT™.  INSI has a tiered structure that can offer decreased rates on 80% of the IT support issues without sacrificing quality.  This is because our tiered structure allows us to charge entry-level rates for entry-level tickets, which constitutes of 80% of the IT support tickets.  Further, we can manage the entire environment, fill in the gaps for an internal IT team, or we can break out the services to the client’s exact needs.  Finally, we can do all this for a fixed fee.

Do You Want To Learn More About The Difference Between “Blocks of Time” and INSI’s Customized IT™?

Go here to see the various types of IT support, their pros and cons, and great questions to ask the provider.

In addition, if you would like to know more about this topic and how it affects you, visit Amazon or Barnes & Noble for a copy of the book IT Outsourcing Secrets – A Small Business Guide to Comparing IT Support Companies.



About Deborah Frazier information

Deborah Frazier has nearly 20 years in the IT Support industry. She is also the successful author of "IT Outsourcing Secrets - A Small Business Guide to Compare IT Support Companies."