Stretching Your Budget with “On-Call” Tech Professionals

One of the decisions that any agency principal faces sooner or later is “How much technological expertise do I need in house?” In an ideal world, you would have a network specialist, an information technology (IT) security specialist, a PC tech and repair specialist, an e-mail server specialist, a WAN/LAN specialist and software experts for every program that sits on your desk.

Unfortunately, every IT person that you give a desk to is taking up valuable space that could be dedicated to the real work of the agency—selling policies, handling claims and delivering quality client service. Also, when you have your CSR or producer who doubles as your IT professional, it’s a real opportunity cost for the agency. The producer is far more valuable selling new business than installing and managing servers. And, don’t forget that full-time employees cost you not only salary, but also require large outlays for workers’ compensation insurance, health insurance and other benefits as well.

To overcome these challenges, a growing trend is to rent the expertise you need by contracting with a technology services company. For a monthly fee (to assure priority service), a project or an hourly charge, you have access to expertise covering all of the technology that sits in your office… yet you only pay for what you use.

Depending on your size, it may be wise to have one person in the office dedicated to routine computer services so that you don’t contract for plugging in a printer or a network cable or turning on a “broken” monitor. However, deciding on the proper security configurations for your network, what virus software to install, what password policies you will need and the proper WAN configuration for your office router involves more than a casual understanding of technology. That’s where the ‘rent a tech’ idea comes in. By having a relationship with a company that has such expertise, you are covered without the high cost of maintaining an employee. You are in effect sharing the cost of such high-priced talent over many different companies.

Another reason why companies like to hire outside firms is the perspective they bring. By hiring outside experts you can stay on the forefront of technology without having to do the research… you can rely on the experts to keep you properly positioned with the technology you need. Using an outsourced computer services firm allows you to focus on your core business, not on technology. As an insurance professional, you simply don’t have the time to stay up with the broad range of technology issues or to obtain the necessary certifications. When evaluating a computer services firm, look for one that’s competent, understands your business and industry, has references that speak highly of the organization and has done the type of work for which you’re hiring them. For example, don’t hire an expert in printer repair to install your server and set up your backup routines.

Most importantly, however, is to contract with someone with whom you feel comfortable. That’s not to say that all computer firms are the same in their technical experience or the services they provide, but it’s a lot like your insurance agency versus the one down the street. The real differentiator is the people. Do you want to work with this firm and its associates? Do you trust the owners? Are their terms and conditions reasonable and flexible? Do you like the technicians that would be assigned to your account? Don’t forget that this is a relationship business just like yours. People want to work with folks they like and trust.

Another factor to consider is the ease of changing technology companies (or of changing service technicians within a service company) as opposed to the difficulty of hiring and firing employees. Moving to another outside vendor for better services or more competitive pricing is far easier than the lengthy and often painful process of letting an employee go and finding a replacement. Also, the risk of being too dependent on a single tech employee in your office can be mitigated by having a broad array of talent at your disposal.

Like any approach to technology there can be a downside to contracting with outside professionals. In the event of a natural disaster, a widespread virus or terrorist event, or even just a really busy time of year, you might experience a delay in getting prompt service. If your system is down and the only three people that can help you are with other clients of the technology consulting firm, it may lead to some anxious hours.

On the other hand, it is probably these same people who have set you up with the proper back-up strategies and procedures that are going to get you through in the end. And, hopefully they’ve set up routine system backups. Failure to do a proper backup is the number one mistake that smaller companies make. And, just because you’re working with an ASP configuration, you still have exposure. Chances are you have valuable Word or Excel documents on workstations that are not backed up by the vendor. You also may have a Web server, an e-mail server or some other server in your office that requires regular backups. You are gambling with the survival of your company when you fail to properly plan for a system-wide disaster or even a single point of failure.

Worth noting is the monthly contract fee that will probably be part of your decision if you decide to rely on on-call tech professionals. While some firms don’t charge this, you will probably have a better relationship with your technology company if you have one. Clients with a monthly fee will generally get a discount on the billing rate and will usually be given a priority on service calls when an emergency arises. Obviously the rate depends upon the company’s geographical location, experience and a myriad of other factors, but in general, Southern California rates are averaging $85 to $135 per hour for on-site computer services. Or, you may pay a retainer of $1,500 per month for 15 hours of on-site services and additional hours needed would be at a discounted hourly rate, say $75 per hour. Or, you may contract for a block of hours, perhaps in increments of 30 hours at a specified hourly rate—and the more hours in a block, the less expensive the hourly rate. Keep in mind if you were to hire a full-time technician, experienced in computer installation and repair, as well as network monitoring, you would probably pay approximately $65,000 (minimum) plus benefits, annually (in Southern California, that is).

As mentioned earlier, response time is an important component of your computer services agreement. Typical response time (not repair time) for most service agreements is based on the number of hours for which you contract or it may be based on the type of problem. For example, a crashed server is a higher priority than a desktop printer needing cleaning. Your service level may provide you with a four-hour response time guarantee, meaning that if your server crashes at 5 p.m., someone would be at your office no later than noon the following day to begin the diagnosis and repair process. Or, you could contract for next business day response time service. That means, if your network printer breaks at 4 p.m., a technician would be at your office no later than 4 p.m. the next business day. The type of response time you contract for depends upon your ability to be down, which generally isn’t too long in today’s networked business environment. And, it depends upon the dollar amount you are willing to pay. It’s probably unrealistic to expect less than a four-hour response time guarantee, even for an emergency. One note of caution: response time doesn’t mean repair time. That’s a variable that’s difficult to predict. Repair time generally depends upon the complexity of the problem and the availability of necessary replacement parts.

If you’ve weighed the pros and cons of outsourcing your IT and decide that maintaining an internal computer services staff is right for you, there is one vital area where you should still consider outside professional help: network security. We live in a world where hackers can destroy your records, disrupt your daily operations, bring down your network or steal your confidential files in seconds. Viruses and worms also pose significant threats. Setting up the proper firewalls, virus defaults and security policies is a job for professionals. This is the one area where outside help is almost a must.

To save money, gain flexibility, improve security, assist with overflow projects or just to help keep you on the cutting edge of technology, employing on-call technology professionals is a trend you should consider. Whether you decide to hire tech specialists or to go it alone, the choice is up to you. The growth of technology specialty firms gives you additional options, however and as every independent agent knows… options are always good.

LuNell Gilliland is the co-founder of True West Solutions, an on-site network and desktop computer services company in the Southern California area. True West Solutions can be reached at (818) 346-2128 or www.truewestsolutions.com.

Topics California InsurTech Talent Tech