Have you received back computer advice from an IT consultant?
Every practice, large or small, depends on technology at some level to operate. If you’ve owned a computer for more than five minutes, you know that no one is exempt from computer problems, system crashes and downtime. While all practice owners can relate to the sheer frustration these issues create, few can put a dollar figure to the actual hard cost to their practice. That is because so much of it is soft costs related to productivity, hours worked and time lost.
What makes the cost of computer downtime even more difficult to determine is the fact that no practice is “average,” and therefore statistics that quantify the cost of downtime for the average practice are worthless.
However, no practice owner can deny that an interruption in their practice costs them money, whether that interruption is caused by a server crash, hardware failure or some other outside force. If you’ve ever had your practice grind to a screeching halt because you and your employees could not access the data or systems necessary for operations, you must have some idea of the frustration and financial loss to your practice, even if you didn’t put a pencil to figuring out the exact cost.
Take a look at these statistics:
- Companies experience an average of 501 hours of network downtime every year, and the overall downtime costs an average of 3.6% of annual revenue. (Source: The Costs of Enterprise Downtime, Infonetics Research)
- 93% of companies that lost their data center for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster, and 50% filed for bankruptcy immediately. (Source: National Archives & Records Administration in Washington)
- 20% of small to medium practices will suffer a major disaster causing loss of critical data every 5 years. (Source: Richmond House Group)
- Last year, 40% of small to medium practices that manage their own network and use the Internet for more than e-mail had their network accessed by a hacker, and more than 50% didn’t even know they were attacked. (Source: Gartner Group)
- Of those companies participating in the Contingency Planning & Management Cost of Downtime Survey, 46% said each hour of downtime would cost their companies up to $50,000; 28% said each hour would cost between $51,000 and $250,000; 18% said each hour would cost between $251,000 and $1 million; and 8% said it would cost their companies more than $1 million per hour. (Source: Cost of Downtime Survey Results, 2001)
- Cybercriminals stole an average of $900 from each of 3 million Americans in the past year, and that doesn’t include the hundreds of thousands of PCs rendered useless by spyware. (Source: Gartner Group)
But even if you don’t factor in the soft costs of lost productivity, there is a hard cost of repairing and restoring your network. Most major network repairs will require an average of 4-8 hours to get the network back up and running. Plus, most consultants can’t get on-site to resolve the problem for 24 to 48 hours. That means your network could be down for one to two days.
Since the computer consultants may charge over $100 per hour, plus a trip fee and a surcharge if it’s an emergency, the average cost of these repairs is $600-$1,000. Over a year, this results in $1,800-$3,000 in costs, not including hardware and software or lost sales and work hours. Of course, those numbers quickly multiply with larger, more complex networks.
The Cost of Bad Advice
In addition to downtime, there is another expense that most practice owners don’t consider: the cost of bad advice when an inexperienced consultant recommends a product, service or project that is unnecessary or incorrect for your specific situation.
Another form of bad advice is when a computer consultant doesn’t take into consideration all the pitfalls and situations that will arise when implementing your project, and grossly underestimates the time and money it will take to successfully complete it. When a consultant makes this mistake, your project ends up way over schedule, and costs you 2-3 times as much in unexpected fees, hardware and software.
It’s gotten so bad that Network World recently noted, “Increasingly, IT customers are crying malpractice and railing against slipped implementation schedules, compounded consulting fees, and disappointing product performance.”
Although the price of bad advice is hard to measure, if you’ve ever been disappointed or burned by a so-called IT expert, you know the costs to your practice are painfully high.
Here are just a few of the ways bad IT advice can cost you:
- Paying for unnecessary projects, software or hardware.
- Paying too much for repairs, software and hardware.
- Accumulating downtime, unstable networks, data loss and security breaches.
- Getting stuck with a “solution” that doesn’t really solve your problems.
- Increasing the time and work you and your employees invest in rolling out a project.
- Paying double by having a competent consultant fix what the first person messed up or complete the project you originally wanted implemented.
- Incurring litigation costs to get your money back from a technician who ripped you off.
- Dealing with the sheer frustration of the problems resulting from poor advice.
Trouble is, it’s hard to know that you’re paying for bad advice until you are already neck-deep into the problems. By the time you get the first inkling that you hired the wrong person, you’ve already invested a considerable amount of time and money, making it difficult, if not impossible, to end the project and look for someone else. Educate your self on the best practices for hiring a Managed Service Provider.