The Cost of Do-It-Yourself IT for SMBs

Small and Midsize businesses (SMBs) face unique challenges when it comes to sourcing and acquiring an IT infrastructure that suits their needs. With IT spending forecast to top $1 trillion by 2020, smaller organizations need to think carefully about how their technology budgets will be allocated.

However, this is typically easier said than done.

Many SMBs opt to create their own computing environment from scratch, eschewing IT managed services providers (MSPs) for a variety of reasons ranging from a misconception of complexity to personal equipment preferences by management. Unfortunately, these companies frequently run into a host of problems which could easily be avoided by obtaining expert advice.

In addition to the dollar costs, there are also other issues related to employee satisfaction, productivity, efficiency, and scalability that can hinder growth and cost an organization.

Let's examine some of the costs — real and intangible — that SMBs who choose to create their own IT systems face.

The Cost of Do-It-Yourself IT for SMBs

Dollar Costs

With hardware, software, and infrastructure to worry about, SMBs can easily find themselves over their heads when it comes to implementing a technology strategy that is cost effective and optimal for their needs.

Midsize companies, due to economies of scale, are burdened with having to spend a higher percentage of their revenue on IT. On average, midsize firms spend $13,100 per employee on IT versus $11,580 for large firms. In total, according to IDC, SMBs with less than 1,000 employees will spend upwards of $564 billion on IT hardware, software, and services.

IT managed service providers can be invaluable allies for SMBs when creating a computing environment. Not only can they provide expert budgeting advice, best practices insights, and guidance on equipment acquisition, they are a driving force in helping SMBs save significant costs through cloud computing.

In fact, IT budget reductions of between 25% to as high as 50% have been reported by various surveys, drawing a direct correlation between saving costs using MSPs versus going it alone.

Productivity Costs

SMBs who implement their own technology solutions also face issues such as outdated or incompatible equipment, non-scalability, and software that is not ideal to support their operations. As well, the resource costs of managing an IT system alone can be fairly significant.

These factors, in turn, can lead to enormous costs in terms of productivity for an organization. Systems that are not optimal for the workload, software that is difficult to use or inappropriate, and the uphill challenge of adapting to new technology can seriously hamper efficiency.

To that end, IT solutions tailored specifically to SMBs are becoming more and more prevalent. And one study found that by simply adopting cloud computing, SMBs were able to enjoy a 25% increase in revenues.

It is therefore apparent that MSPs can help SMBs reduce expenses and raise profitability by helping them ensure that their technology infrastructure is right for them.

So, although it may seem attractive for SMBs to assemble and implement their own IT infrastructure, engaging the expert guidance of a managed service provider can dramatically save costs both in terms of dollars and organizational productivity.