What is the “Budget” IT Support Plan?
The “Budget” is an IT support program with a base package plus a reserve of IT support dollars. Subsequently, the budget reserve can be used for IT support, hosting, professional services, managed security, custom programming, and unified communications.
Positive Aspects of the “Budget” Program
Companies that offer this program usually rank high on the IT maturity scale. Further, many clients like the idea of rollover “hours” and only paying for what they use. Last, they like a one-stop-shop for all their IT support needs.
Negative Aspect of the “Budget Program
Unfortunately, the billing and invoicing of this plan are extremely complex. In addition, it puts the full risk of the cost on the client. Subsequently, there are two parts to this plan: the base package and the budget reserve.
The base package covers all the things mentioned in the IT Maturity article. While it is obvious these companies invest heavily in people, processes, and technology, it’s the clients who absorb all the cost. For example, their base package covers network monitoring and Block and Tackle Security. However, you will pay a hefty difference if you want your desktops monitored as well. As a result, the base package could cost as much as a third of the total monthly commitment.
Now you get into the really tricky part: the budget reserve. For instance, these types of companies claim that the client can apply any services against the IT budget. In addition, the unused budget will roll over for an additional two months. However, the reality is there is rarely any budget left over. Let’s see how below:
Basics of Budget Reserve Calculation
Simply put, the average budget is based on 30 minutes per workstation per month and 1 hour per server per month. As an example, 100 computers would require 50 hours. Next, they calculate the 50 hours with a combined industry average of 10 % onsite rate and 90% remote rate. Consequently, every time a client calls in, that time is applied against the budget. Since the calculations are based on the average industry usage, the likelihood of having any leftover budget is slim.
Every Level and Service Has a Different Cost
However, the Budget plan doesn’t stop there. In fact, those are just helpdesk rates. Hence, everything above helpdesk level is at a much higher rate. Therefore, the additional work eats away at your budget much faster!
In addition, the client can also apply other service options toward their budget. For example, the client may apply hosting, telecom, programming, or managed security toward their budget. This guarantees they will run over their allotted budget since the budget is based on the calls, not additional options.
Why Companies Choose the Budget Program
The client wants superior service at a set amount per month. In fact, many believe they can control their cost and stay under budget. However, industry metrics do not lie. It will take an average of 30 minutes per workstation and 1 hour per server to support a client environment whose users are dependent on their servers. If a company chooses the budget plan, they will need to prepare for these realities.
A Better Alternative
A better alternative to “Flat Fee” 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 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 “Budget” IT Model 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 on each one.
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.