Flaws in Business Plans of Remote IT Department?

Anonymous Tech Support asks: "I work for a small technical support company that is hired by local companies to manage networks, fix computers, and be the IT department in general. Last week I was working on a small network of 25+ computers. After a week of emotion and annoyances (long story), I have to ask the Slashdot community: How many of you are employees of small 'outsourced IT departments?' How much does your company charge per hour and how much do you make per hour? What sort of agreements do you have with your employer (non-compete etc.)?" The company charges $65 per hour to regular clients and I make very little of that. It seems like the business model is faulty, pushing us low-level yet skilled employees to start a company and go-it alone. It also seems like outsourced IT departments cannot have employees that will not leave or be disgruntled unless they are either a) paid enough or b) given a stake in the company. Do any of you have experience in this? What sort of business models exist out there for the remote IT department?"

Comments

Re:What I've seen

[helphand]

Ideally, someone would give a tiered labor rate based on the skillset (desktop, server, network, security, etc.)

I agree. I have a firm on retainer managing our IT infrastructure. The retainer covers remote monitoring and remote helpdesk support supposedly on an unlimited basis. That part I have no problem with, but it irks me to no end that I get charged $150/hour for any onsite work, regardless of the complexity. Installing a new hard drive on a workstation shouldn't require the level of expertise that diagnosing and fixing a network issue does, they shouldn't be priced the same. Scott

Not really a flawed business plan...

[Gybrwe666]

This happens to be a great business plan if you own the company. However, at the billing rates you're talking about, its unlikely that the regular worker in your company is benefitting much at all.

But the fact remains that this business plan has been used with varying degrees of success for many, many years. Some efforts are successful, some are flameouts...

I worked for many different companies like this in my early IT career. The last time I was did this for a job, my boss was paying me $13.25 and billing me at $90.00 or so. We were a fairly specialized provider of a particular field of IT support, and owned the market we were in. The owner needed myself and the other tech to justify her hardware sales, because she was selling commodity hardware at or above MSRP. (Go ahead, see if you can pull that off for a decade!) The engineers were good enough that clients payed more for hardware because they knew that when anything bad happened, it would get fixed and fast.

In fact, I left because one of the owners had just bought property on Nantucket after giving herself a $50,000 bonus (on top of salary and commission) and I got $2000 bucks and a drink. My leaving made them realize that they couldn't find people with my skillset and changed the company policy to reflect profit sharing and a host of other things.

However, your employer probably knows that he can (and undoubtedly will) be able to replace you with another adequate tech for the same amount (or less, as you get raises) and simply doesn't care.

Several of the companies I've worked for doing break-fix jobs had gobs of talent walk in and out of their shops, but simply didn't care. Guys I've worked with have ended up at important jobs running IT departments for huge companies or doing other similar things but started out building PC's or fixing them for $7.00 an hour in the nineties...

Remember that if you do your own consulting, if you pay taxes on that you'll lose a huge chunk of the hourly. Its tough to run your own business, especially finding new clients and getting enough clients to actually pay the rent *AND* food *AND* high speed internet. I did that for a year or so as well, and while it was fun for a while, it got old quick, especially during tax season when I had to fork a decent chunk of change for my accountant to get everything in order.

The good news is that your can likely learn as much as you want and actually start a career doing what you do now. Just don't plan on doing it where you are currently at...

Re:What I've seen

[NoMaster]

... but it irks me to no end that I get charged $150/hour for any onsite work, regardless of the complexity. Installing a new hard drive on a workstation shouldn't ...

No, but that $150 for the first hour tries to cover the overheads - sourcing parts, organising the tech, getting to your site, etc. It also acts as a discouragement, to prevent you from calling them out to replace printer toner, paper, help people locate their "Any" key, etc.

(Don't laugh - I've seen people call out their IT contractors for 2 of those 3 things...)

The $150 for the second and subsequent hours is because, by that time, it is getting to a suitable level of difficulty...

Re:What I've seen

[helphand]

i suspect they're deliberately pricing themselves out of the "sure, i'll plug in your monitor onsite" market. if it's easy enough that you could get an intern to do it, you probably should.

But that flies in the face of the basic premise of outsourcing the IT infrastructure. I want the infrastructure managed, completely. I don't want to have any IT staff at all. If what you're saying is true, then basically the vendor I've chosen is not truly offering a fully managed solution. Might be time to look for another vendor...

BTW, the 'plug your monitor in' example doesn't really fit. I would expect their remote helpdesk to have already gotten past the basics by the time an onsite visit was required. If the problem was truly that basic, the supplier deserves to eat a loss on the call.