Somewhere in Pittsburgh, an economics professor at Carnegie Mellon must be smiling. It’s rare that you can relate a theory from a freshman college class to your professional life decades later. Yet here I am.
While working with small and medium-sized businesses to help them evaluate outsourced IT options, I have met many accomplished lawyers, architects, CPAs, social workers, engineers, and countless C-suite execs who manage IT along with their many other responsibilities. Given financial constraints, it certainly makes sense to have people wear multiple hats wherever possible, but what’s the real cost of doing so?
The real cost of DIY IT
Well, it’s time to find the economics textbook you buried in the garage next to the badminton net you promised to set up for the kids. If you do locate the book, flip to the index and look up the theory of comparative and absolute advantage.
Stripped of esoteric formulas and academic gobbledygook, this seminal economic theory simply states that if Michael Jordan can paint your house better than you can, the world would still be better off if he stuck to basketball full-time and have someone else do the painting. Similarly, if an engineer bills at hundreds of dollars an hour, why would you want him/her handling IT—a subject he/she did not study or have much experience in?
Even for those engineers who are great at IT tasks, odds are high that they would generate more value doing engineering and let IT be outsourced. That way you also wouldn’t have to worry when they take their two-week dream vacation to scale the mountains of Machu Picchu where, I am guessing, the wifi signal is likely to be spotty.
Is your IT strategy proactive or reactive?
This issue becomes even more acute as technology weaves deeper into the DNA of modern organizations. Do you want to funnel the brightest new college grads into your leadership pipeline? Well, you better have the tech tools that they are accustomed to and a help desk that resolves tickets in minutes not hours. And that help desk should be focusing on understanding/resolving root causes of persistent issues not just fighting the same fires repeatedly.
Do you want to keep your long-term employees happy? That means you need to become an expert at offering remote work options and be able to cope with the incumbent increased security risks. Do you want to avoid waking up one day to a terse email by a hacker in Russia demanding five million Bitcoin to unlock your customer data? Isn’t it better to have an outside company monitoring your network security 24/7 to minimize the chance of that happening?
The list can go on longer if you have the stomach for it. The point is that for any small or medium-sized organization, there is a real and very high cost to handling IT in-house. It’s worth estimating this cost (though it’s rarely done.)
The point is that for any small or medium-sized organization there is a real and very high cost of handling it in-house.
Valuable time wasted on technology
These “hidden” costs don’t even include the value to the organization of using that time saved for something more productive. How much would it help your business if that bright architect you hired was able to bill an extra three hours a week? What if that CPA brought on an additional client each quarter?
Or did your head of grants score big with that new foundation? While your organization benefits from taking back this valuable time, your outsourced IT partner—if you pick the right one—could be sharing best practices gleaned from decades of experience with dozens of clients, and presenting you with guidance and a real IT roadmap.
Don’t forget all those hours other employees are wasting doing technical workarounds or worse, not reporting IT problems. It’s just a matter of time before one of those “minor” productivity drains becomes an outright crisis and costs you more money in one day than the entirety of your IT costs for the year.
I never got the chance to discuss the theory of comparative advantage with Michael Jordan when I met him in Chicago as a new marketing assistant at Gatorade.
If I had, I am sure he would have confirmed that despite any potential prowess at painting, his abilities were better suited for the bigger canvas of an NBA court! By outsourcing to the right IT managed services company, you can have everyone focus on what they do best. One last piece of advice: don’t go looking for the grade you got in that economics class- that’s a secret best left mysterious.
Amer Yaqub is a Senior Technology Advisor at MainSpring and also an adjunct business professor at the University of Maryland Global Campus.