Technology

The Factors That Influence IT Service Costs

Most third-party IT service providers price their work using a sliding scale. The size and complexity of the task at hand naturally influence the size of a quote. Here are the factors that they analyze when developing a bespoke quote for a company.  

  • Staff Numbers

The simplest metric that can be used to estimate the cost of third-party IT services is the number of staff working for a company. The more staff that are working, the more devices that will generally need to be maintained. There will also be a larger network to secure the larger a staff cadre is. 

  • Security and Compliance Requirements

Security requirements are highly influential in terms of pricing. If a company is handling sensitive data, then it will likely be a juicy target for hackers looking to install ransomware or conduct man-in-the-middle attacks. The more vulnerable a company is, the more it will have to pay for IT services. 

Likewise, the more stringent a company’s compliance requirements, the more it will have to pay for IT services in general. Compliance requirements cover the company’s internal standards and adherence to the law in regard to data protection. 

  • Number of End User Devices

Although related to the number of staff within a company, the number of end user devices can vary according to other factors as well. Some businesses provide each staff member with several devices – all of which must be covered by the IT service provider. Naturally, the more devices in use, the higher the cost will be for IT services. The complexity of the devices used is also often taken into account. 

  • Number of Servers

In-house servers are incredibly labor intensive. They are hot, prone to malfunction, and need to be regularly overhauled. The more servers a company has, the more money it is liable to pay for IT services. This is one of the reasons for the mass migration of businesses to the cloud. Cloud computing and storage does away with in-house servers entirely by connecting end users to servers hosted remotely over the internet. 

  • Number of Software Licenses

Quotes for IT third-party services tend to rise incrementally with the number of software licenses that need to be maintained. Although the third-party IT service provider will not be involved in paying for these licenses, their workload will still increase with the number of programs that need to be maintained and trained for. Many programs have unique required skills, and IT professionals will take care to ensure that they are fully trained for each new type of software maintenance. This costs money. 

  • Extent of In-House IT Capability

Some businesses outsource their IT services despite having a pre-existing in-house IT team. This is often the case for businesses that are planning for a period of expansion or businesses that are undertaking a large technology upgrade or migration to the cloud that will occupy their existing IT team. Prices typically fall when a third-party company is able to liaise with IT professionals from within a company.   

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