Compare IT Support Costs & Services

All IT Support Cost and Services are not created equal.

Did you know that ALL IT contracts fall under these eight categories?  Consequently, the one you choose determines the outcome. As an example, we have included IT support cost and service description, Pros, Cons, and questions to ask the provider and their clients.

Only INSI IT offers the Customized IT package.  Compare any of the IT support plans to the Customized IT support plan and see which one is better.

How MSPs set up their offers

Ad hoc– Ad hoc is typically looks like the least expensive, but it ends up costing you more in the long run.  These services are usually, provided by independent contractors, although some companies offer it as a means to get their foot in the door.

As a stand-alone service this offering is dangerous.  It does not offer any monitoring or updates which makes it easier for viruses and hackers to creep into the system.  Further, there is no documentation on the environment, hence the engineer can only approach the issue based on the symptoms.  Consequently, without understanding the root cause it can lead to breaks in the system and expensive repeat visits.

Last, they cannot staff appropriately.  Therefore, they have no way of knowing when these types of calls, and how many, will come in.  As a result, they take care of their IT support clients first.

Most important, if it is offered by a company, their recurring revenue clients will come first.

Customized IT package - INSI IT

Great Questions to Them:

  • What is your experience?
  • How long have you been in business?
  • What happens to me if you move, get hit by a bus, or accept a fulltime job?
  • What do you do if you reach the limits of your knowledge, i.e., am I billed for the time you are learning on my system?

Block of Time– Blocks of Time are offered by “fly-by-night” companies.  You will typically see these companies go out of business and start up under a new name. Why?  Most often it is because they do not have a reasonable expiration date on the hours.  Imagine the liability when multiple clients call come in at once.  How can they make sure they are staffed well enough to meet any SLAs.  How can they make sure they have the funds to hire extra help?

In essence, they are a “paid upfront ad hoc” with a touch of monitoring.  Watch out, when they close their doors you have lost your money.

Great Questions to Them:

  • How long have you been in business?
  • Have you ever been in business by another name? (Research the web and LinkedIn)
  • What are your hiring standards? How many people do you have at each level?
  • How many engineers do you have on staff?
  • What happens to my pre-paid hours if you go out of business?
  • What do you do if you reach the limits of your knowledge, i.e., am I billed for the time you are learning on my system?

Helpdesk– True helpdesk support is priced low on the IT support cost scale.  The purpose of a help desk is to troubleshoot tier 1 and 2 level problems. Tier 1 offers the first line of customer support, addressing the most basic customer issues such as general inquiries, non-technical questions, password recovery, and basic procedural “how-to” questions.  Tier 2 is for more common mid-level technical questions.

The helpdesk is intended to free up time for IT management team to focus on larger network issues, projects, and strategy.  In fact, the helpdesk is the backbone of IT operations as it resolves 80% of the employee related calls.

NOTE:  Managed Service Providers who claim to have a helpdesk, are really charging tier 3 rates for basic Tier 1 & 2 support.  A true helpdesk is billed based on the number of calls.

Great Questions to Them:

  • How do you define Tier 1 and 2
  • What credentials does your helpdesk staff have?

Note: Remember these are entry level people. If they are using desktop engineers then this is not a true helpdesk and you are paying Tier 3 rates.)

  • How long have you been in business?
  • What are your escalation procedures?
  • What performance metrics do you provide to me?
  • How do you bill? (If it is anything other than by the call it is not a true helpdesk and you are paying Tier 3 rates.)

Network Monitoring– Monitoring can create major IT support cost savings.  Consequently, it is essential to any computer network.

For instance, it detects slow or failing network components, such as overloaded or crashed/frozen servers, failing routers, failed switches or other problematic devices. Most companies that offer this service also perform updates and patches to the operating system which keeps viruses and hackers from creeping into the system.

Managed service agreements including Use It Or Lose It, Budget, and Flat-Rate Plans include network monitoring as part of their service, although it can be offered as a stand-alone.

Great Questions to ask

  • What other services do you provide in conjunction with Monitoring?

Use-it-or-Lose-it– You will start to enjoy IT support cost savings at this level.  For one thing, this is more sophisticated than the ad hoc or blocks of time.  For example, these companies do the documentation on the network, monitor the network infrastructure, and usually have staff on hand to respond to issues in a timely manner.

Like most mature IT departments, their pricing is based on historical data that each employee, network device, or server will take X amount of time per month to support.  If you stay under the allotted hours your IT support cost will stay the same, but if you go over there are excessively high overage fees.

These companies are typically small and it is ideal for a company who has no growth plans, a stable network, and who does not have a lot of IT needs.  Further, these plans are for the entire network – you cannot break out services by the type of equipment or level of support.

Great Questions to Them:

  • What is your staffs experience?
  • What fees will I suffer if I exceed my allotted hours?
  • Can I talk to three references who have not exceeded their hours?

Budget– The “Budget” is one of the most expensive IT support cost in the business.  The “Budget” is a unique IT support program intended to provide IT support across multiple company offerings such as network support, hosting, managed security, custom programming, and unified communications.

Just like any other mature IT organizations, they base their price on historical data that each computer, network device, or server will take X amount of time per month to support.  You pay for a base package plus ½ an hour per workstation, 1 hour per server, and 15 minutes per firewall per month at high industry rates.

They claim you can apply hosting, managed security, or any project applied against the budget, but the truth of the matter is that if you do not leave the appropriate amount in the budget, you will run over every month.  In fact, the average client runs over their allotted budget amount by 1.7X the monthly committed rate.  As a result, this makes the forecasting of IT expenditures useless.  In addition, each account is assigned a “client engagement manager” which is nothing more than a technical salesperson who tries to up-sell you.

Great Questions to Ask Their Them:

  • Can I see an example of your invoice?
  • Can you let me speak to 5 of your clients who have not gone over “budget?”

Great Questions to Ask Their Clients:

Note: It is very important you ask their clients these questions and not them.

  • How often are you within budget?
  • Is your invoicing easy to understand?
  • Do you ever get overbilled?
  • Is the pricing you get for projects or added services competitively priced?
  • Do you believe the service you were offered matches with what you were promised?  Why or why not?

Flat Rate– A Flat Rate is the by far the most common type of IT support.   Under this program, you pay a monthly cost and everything under the scope of the original contract is included.   Some price per device.  Some price by “seat”.

Under this program, all helpdesk calls are included.   Sounds great, except for the fact that they are counting on 80% of the support tickets being Tier 1 or Tier 2.  Subsequently, low paid interns or entry level people handle the tickets.

They make their money by charging Tier 3 rates at $150- $250 per hour for Tiers 1 & 2.  In addition, moves, adds, and changes are an additional cost and the contract may be adjusted accordingly.

What’s more, the company usually has some minimal requirements for taking you on as a client, such as equipment warranty.  Since there is a lot of time investment upfront, these companies will typically have longer terms on their contracts.

Most importantly, there are many different flavors to this outsourcing arrangement.  It is important to know the terms of your contract, i.e., end dates, renewal clauses, and what constitutes a breach of contract on their end.

Great Questions to Ask Them:

  • Can I see an example of your invoice?
  • Do I have access to my passwords at all times?
  • What if I am unhappy with your services, how difficult is it to end my contract early?
    • You want to understand the impact of ending service support as well as moving away from their hosting services.
  • If I license through you, is the license in my company’s name or yours?
    • You need to know if this is transferable.

Great Questions to Ask Their Clients

Note: It is very important you ask their clients these questions and not them.

  • Is your invoicing easy to understand?
  • Is the cost predictable?
  • Do you believe the service you were offered matches with what you were promised?  Why or why not?

What are Your Money Wasters?

Did you know that IT Support Companies are one of the biggest employers of interns and co-ops?  They pay entry-level pricing for these resources, but they charge you the same rate as their senior-level engineers.

Ask them:

  • Do you hire interns?
  • What type of work do they do?
  • If I know someone who would be a good fit, what do you pay for an intern?

At INSI, our cost savings for interns and entry-level engineers are passed on to you.

IT Support Company

The Real Cost of Traditional Flat Rate Programs

IT Support Costs

Have you ever wondered what the real cost is for your IT support contract?

Do you want to know how they charge so you can make a side-by-side comparison?

Do you know what is competitive and what isn’t?

When you look at the IT support agreements it is easy to get confused.  Some charge per seat which includes workstations, firewalls, and servers.  Other’s charge by device which includes every device on the network.  The rest charge by hour.

In fact, many will add an additional “management fee” to for things they should be doing anyway.  Some will even hide costs in the options.

 INSI Makes it Easy to Calculate Your IT Support Cost

INSI makes it easy to calculated the IT support cost so that you can do a true side-by-side comparison.  Subsequently, we believe there should be no hidden cost.

Here is a simple trick to compare your IT support cost on a flat rate, budget, or use-it-or lose it plan is to add the number of workstations, firewalls, and servers.  Now take the total of the IT support agreement and divide it by that number.  Now you have a per seat cost and can compare IT support companies.

Compare Hourly IT Support Cost

Do you know what is a fair IT support Cost?  For pure helpdesk, i.e., end user issues, it is between $14-20 per call.  Since the average time on the phone is less than 15 minutes, you can assume this is between $56 – $22.50 per hour.  The amount depends on the volume of expected calls which is calculated at 1.5 calls per user per month.  Note: Helpdesk accounts for 80% of your calls.

For Tier 3, or senior level support, you can expect to pay between $100-$250 per hour.  The difference depends on the type of project or skill level required.  This accounts for 20% of your IT support cost.

Based on the above information, if the IT Support cost are too low, you can often assume they don’t have commercial real estate, insurance, manpower, or professional ticketing, monitoring, or asset tracking.  All of which indicates whether or not they are financially and technically competent.  If it’s too high, they are simply overcharging.

The Truth About Flat Rates   

The majority of IT Support companies charge a flat rate.  This means x cost per seat or per device per month.  In the table below we make it easy for you to see what you are actually being charged based on the industry standard of time to support a specific unit.

As an example, the industry average states that it takes 30 minutes per workstation per month to provide full IT support.  Sometimes it’s more, sometimes it’s less, but it all evens out in the long run. That means that two computers can be taken care of in one hour per month.  So, if they charge $75 per seat, then they are actually charging you $150 per hour to support your computers.

See the chart below and ask yourself if you are being charged competitive IT support costs.

Real Cost of Flat Rate Programs

The Benefits of Customizing Your IT

  • Reduce your monthly cost by utilizing a true helpdesk versus Tier 3 at managed service rates.
  • Design your IT program around the IT efficiencies you already have.
  • Receive the exact IT support you need – no more, no less.
  • Gain more control over your IT environment.
  • Easily adapt your program to changes in your business.
  • Avoid surprises.
  • Facilitate easy budgeting.
  • Phase the contract to your specific needs.
  • Terminate the contracts if you are unhappy.
  • Gain more efficient and reliable outcomes.