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The Hidden Cost of Poor IT

The Hidden Cost of Poor IT



Anyone who has bought a car, a home, or the latest iPhone knows that there’s a lot more to the price of an item than the price of an item. Maintenance, complementary products, and repairs are every bit as much a necessary and significant expenditure as the original price tag. The same is true of IT costs for your business. If you’re not careful, there are a lot of hidden expenses that can end up costing you a fortune.

When most organizations look at the cost of technology, their initial view is: What do I pay my IT provider and what do I pay my internet service provider? When it comes to IT, those surface costs are just the tip of the iceberg. But there’s a bigger issue of IT productivity that needs to be factored in.

Let’s look at just one example of a hidden IT cost: lost time due to IT-issues. A recent CareerBuilder Harris Poll survey found that the average worker wastes 22 minutes a day wrestling with IT issues, which is 91.6 hours annually for a full-time employee. If the average worker makes $50K/year “fully loaded” (or $30/hour), that adds up to $2,748 in productivity losses, per employee, per year. And that’s just considering basic IT-related issues, not server shutdowns, security breaches, and data loss.

While you may not mind the inconvenience and cost of an annual $2,748 expense, it gets pretty pricey when you realize that’s only for one employee. Here’s what it looks like for an entire staff:

5 employees – $13,740

10 employees – $27,480

25 employees – $68,700

50 employees – $137,400

And when an issue occurs requiring outside IT assistance, every hour of “reactive” support equates to three hours of productivity impact for the end users, which include not only work interruptions but also inconveniences caused by technicians resolving the problem. If you multiply that out, what you really see is that your focus should be on reducing the noise and reducing the number of issues before they get out of hand.

If I can take the biggest asset of the company — which is payroll, the people, the team — and I can use technology to dramatically accelerate its productivity, that’s what moves the needle forward. That’s what brings the balance sheet forward for that company. Our clients see that IT is really an investment. It’s a productivity accelerator and it can make or break a lot of companies.

Every business knows that there’s a cost for quality IT.

There’s an even greater cost when it’s poor.

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