What is my IT costing me? And how much should I be spending?

Today I want to explore how much you should be investing/budgeting on your businesses IT, and what the costs can be when you don’t.pounds-cash-mooney_142217

Typically, based on a 3 year lifetime, the cost of providing IT for a single member of staff is around £2100, or roughly £700 per year. This is the cost of the computer itself, a copy of Microsoft Office and the support associated with the machine, and a fraction of the costs providing infrastructure, such as internet, email and file and print services. These costs don’t factor in training on the basis that most people these days have enough knowledge to use Windows and Office.

Let’s assume that a member of typical London office staff commands an average salary of around £25K annually – the cost of the technology is less that 5% of their annual cost.

Now, for a small business £700 per year for supporting a single member of staff feels expensive. If you have 10 members of staff, you’re looking at £7000 per year. With this in mind, we see a lot of smaller companies scrimping on their IT spend as it is considered an intangible benefit and simply a cost.

In our experience, businesses that fail to invest appropriately generally lose efficiency through poor reliability, performance and a disproportionate amount of support. This means in years 4 and 5, the overall cost of the IT becomes significantly higher – this is mostly in productivity lost though maintenance, slowness and in some cases using outdated or aging software.

Another thing to consider is that by failing to improve and upgrade can lead to a crises situation where a complete system failure can lead to a member of staff being out of action for 1 or more days – the salary cost of this is roughly £100 per day, let alone the cost of lost business. If this turns out to be your server rather than a PC, this will hit £1000 per day salary costs (assuming 10 user business), plus the loss of any potential business (we’ll assume that your existing customers will forgive a day or two of being without your services), and the resultant increased workload which can hinder morale and add further cost if you find yourself having to pay overtime to make up a backlog of work. Added to this, last minute or panic IT purchases tend to be more expensive (typically increasing install cost by 50% and hardware by 25%) and the costs start to add up quite dramatically.

So, save yourself some heartache and grief. Plan and budget and appropriately. Failing to do this can lead to problems later that can cost you greatly. If you need some help with this, please come and talk to us. We can help.