Flaws in Business Plans of Remote IT Department? 44
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?"
What I've seen (Score:3, Informative)
In practice, these folks try as hard as possible to stay to a fixed amount of hours and charge for change requests
We have seen $130-$150/hr
Ideally, someone would give a tiered labor rate based on the skillset (desktop, server, network, security, etc.)
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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 d
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if the IT firm has a problem with you doing the simple stuff in house, that's another issue.
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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 ano
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and you're probably right to look for another vendor. there's a point where any growing company has to get their act together and decide what exactly they're offering.
i dunno, good luck.
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Retail stores do the exact same thing. Consider electronics. A new television usually is within a small window of room for pricing. One store will have it for $499, another for $510. It'll probably cost just as much in gas and distance traveled
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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
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Well, my perspective is that they are recovering their overhead from the retainer and that they should be partnering with me for cost effective solutions to the routine matters that come up in IT, including the occassional need for a real onsite visit to solve a problem.
Now, I do agree that dispatching a tech for silly things like changing toner ought to be discouraged. We're not doing that and my expectation is that their remote helpdesk people would resolve all of the dumb end user issues remotely, witho
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I see a pretty obvious flaw. (Score:2, Insightful)
Do yourself a favor and read some books about running a small business.
So do you think that in a regular 9-5 job ... (Score:2)
The only real difference between working in an outsourcing IT company and working in a cube is guarenteed hours.
charges (Score:3, Insightful)
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SoHo rates (Score:1)
Re:SoHo rates (Score:5, Informative)
Why you ask? See it's all in the contacts, and the fact that if he leaves now (when he now has contacts at client companies) he's screwed. The company he has worked for will do whatever it takes to bury him before he can gain any clients of theirs he's dealt with. And if (and is most likely the case) he had no client contacts before taking that job he has a 0.00001% chance of gaining clients.
During college I came back from a larger city to the area I'm from and tried to apply my work as a network consultant back there to get me new bussiness here. I ahd no contacts and at least 3 existing companies did much the same as the one he works for (from the sound of it). Major companies (200+ staff within the area and the ones with money to spend) have their own IT departments (however small those may be), so only the small fries need network consultants (aka the 'portable IT department'). The problem? Those companies can't even pay $100/hour. Most of the existing 'firms' charged $80, which was nearly the limit those places coudl afford (in fact I know several that would toss the consultants out when the reached whatever fixed limit they could afford whether the work was done or not).
I came in and found I knew no one... I couldn't even get my foot in the door with most places, so I ended up taking a retail job for five years... It's been a year since then and I have developed a few contacts that will get me work, but I have about half a dozen clients who can barely afford to pay me (I've had to take some assignments on very low flat fees, or even down work for free to get my foot in the door). It's been a very long and tough process. Even now I'm looking at a long term conttract that pays almost nothing compared to what I will do... The contract calls for me to create a computerized inventory system and client database and then set up an online store from scratch (which isn't even exactly within my normal range of skills)... All by myself. What am I being paid? ~$1800/month as a flat fee. At which I'm more expensive per month than their rent and only because they feel I can make at least that much a month for them through the web am I getting this job at all. It will be the most I've earned yet since I came back.
You make it sound so much easier than the reality is...
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And there's a huge community of mods and forums to help you extend and enhance osCommerce based sites.
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Not really a flawed business plan... (Score:4, Interesting)
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...
A few things to look at... (Score:4, Informative)
This will not endear me to the general Slashdot community, but if you search Yahoo!Groups for some of the MS Small Business Server communities, in particular the smallbizit or "managed services" group, you'll find small business owners discussing the ins and outs of making a business work - including profitability and if you do some archive searchs what they're offering for benefits. If you participate in the OS religious wars, you may want to skip it, but if you can look past that, there's some value. A lot of the discussion is in moving a business from "break/fix" pricing to "managed services." You might Google "The SBS Show" which is a podcast talking about a lot of these issues, interviewing different business owners.
One way to adjust for it (Score:2)
That way I don't have to give away my company, and the income to those who bring the clients in is much higher than those who get assigned a client.
my exp (Score:2)
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I do exactly that job (Score:2)
We charge £39 + VAT per hour, but are looking to increase this a bit soon. We also have "day rates", which is basically 8x39 but includes any overtime we do that day. We also have out-of-hours rates, which are £65 + VAT per hour. Core hour
Service Business is tough anywhere (Score:2, Informative)
I have also audited change order costs for contract work, including employee costs.
Consider this:
Basic 40 hrs/wk = 2080 hrs/yr
Assuming independent (sole Proprietor), simple basic in US
As an independent you will be lucky to get paid for 50% of that. Employee get paid for all
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So start your own company and go it alone. (Score:1)
What's stopping you?
$125/hr as-needed (Score:2)
As the most experienced tech in my company (nine employees, of which 4 are technical and 2 are part-time developers), I am paid ~$45K/yr which is