The Real Cost of Traditional Flat Rate Programs

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.

Unit Type Average Time Required per Month Average Monthly Flat Fee Cost How Many Units Can Be Fixed in an Hour? Calculation What You Are Actually Paying per Hour
Desktop/Laptop 30 Minutes $50 – $100 2 $50 – $100 per half hour  X 2 $100 – $200 per hour
Thin Client, Tablet or iPad 10 Minutes $25 6 $25 per every 10 minutes X 6 $150 per hour
Firewall/Router 15 Minutes $30 – $75 4 $30 – $75 per 15 minutes X 4 $120 – #300 per hour
Switch 10 Minutes $15 – $40 6 $15 – $40 per 10 minutes X 6 $150 – $400 per hour
Basic Application
1 Hour $100 – $400 1 $100 – $400 per hour $100 – $400 per hour

More information on calculating your IT costs can be found in the book, IT Outsourcing Secrets.

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