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I wrote this article about a year ago for my own Blog, but I've received many excellent reviews by IT professionals who've read the document. I believe this should be read by Human Resources and general business management who will need to manage IT professionals.

So you're talking about having some work done on your network and receive a price. Let's say IT consultants in the industry average $135 per hour.

Your first reaction might be "That's outrageous - how can they charge that much?!" And you immediately think about hiring a full time person to do it internally. There are a few flaws in the logic that people use to make that decision, and I would like to walk you (the potential employer of that IT person) through the logic of hiring and cost per hour.

I want to compare the benefits of hiring an IT staff member to hiring a full time staff auto-mechanic.

IT Staff

1. Its my experience that a really well maintained network with 50 computers can be managed part time by an excellent IT manager. 20 hours a week is more than enough especially if you're not doing any special projects. You should therefore double any hourly rate you might pay because assume about 50% of their time is "busy work" that they do (to ensure you see them as necessary - they don't want you to know it's just 20 hours a week).

2. Its also a fact that a dedicated IT person with a core skill set (like a pure DBA/Report writer) is faster by at least a factor of two than his generalist counterpart doing the same thing.

3. It is in the interest of an consultant to complete tasks in their estimated/quoted time frame. it is NOT in the interest of an hourly staff member.

4. Even a really great IT person can't do upgrades and big special projects on their own. They either hire outside consultants or you are suddenly hiring "assistants" for them. It is in the interest of internal IT staff to make upgrades look very complicated and time consuming even if they are not really so.

5. The going rate for a top-notch full time IT person in Toronto, Ontario - with ERP, Database, Networking, Report Writing and Programming skills - if you could even find such a person at all - would be at least $70,000 per year with 3 or 4 weeks vacation plus benefits. Call it $60 per hour absorbed. Therefore you're looking at $120 per USEFUL hour.

6. More likely you're going to have to hire 2 people at a total of $90,000 per year. Call that $75.00 per hour, Now you're at $150 per USEFUL hour.

Auto Mechanic

1. I think that most people would agree that a really well maintained fleet of 20 cars can be managed part time by an excellent mechanic. 20 hours a week is much more than enough. You should therefore double any hourly rate you might pay because assume about 50% of their time is completely idle.

2. Its also a fact that a dedicated mechanic with a core skill set (like a pure transmission specialist) is faster by at least a factor of two than his generalist counterpart doing the same thing. Most people have experienced bringing their vehicle to the "Transmission" guy to get that work done.

3. It is in the interest of a garage to complete the repair in their estimated/quoted time frame. it is NOT in the interest of your own mechanic.

4. The going rate for a top-notch mechanic is $60,000 a year (someone who can handle any repair to any component). Assuming that 50% of their time is idle, plus benefits call that $90 per hour.

5. Its most likely that you'll need to send your cars out to a specialist to get things like body work or transmission work done because your mechanic won't be able to do some of those things.

Its pretty clear that the $135 per hour rate is very fair, and in fact hiring a consulting firm with experts in all the different areas of IT will probably save your company money - even if you're spending $120K a year - because before too long you're going to have assistants and helpers who total more than that in salaries and benefits going the internal route.

It is easy to understand that a Body specialist doesn't know how to strip down an engine, and a transmission specialist might not be good at electrical. Similarly there are different areas of IT and you should be aware of them. They are as different from one another as the examples of different kinds of mechanics. Someone good at 2 of these would be a really excellent IT specialist. Someone good at 3 is excellent. Someone good at 4 is extraordinary.

* ERP - Enterprise Resource Planning - also often called a Business Analyst. Those with this skill set are experts in the use and configuration of your internal ERP business system. They are sometimes capable of limited programming and report writing skills, but are rarely truly strong in the technical skills (below).

* DBA - Database Administrator. Can do things like pushing in new unit prices, track down errors in data, make sure DATABASE backups are correct and database speed is maintained.

* Networking - Network Administrator. Handles installing new servers (the hardware), setting up users, correcting network errors (can't connect from home), installing network services (getting into our computers from home) and most important handles security and firewalls. Those who are both excellent at these tasks and focused on proper preventative maintenance activities are hard to find.

* Desktop - Desktop Support. Usually an entry level position. Good at installing new computers, setting up printers, removing Viruses etc... Few people who are strong on the Networking side like to do these tasks but are good at it. Those who are good at these tasks can be good or terrible at handling servers and Networks.

* Report Writer - Not the same as a programmer. Good at creating reports and designing a user friendly layout. Report writers usually know a little bit about how users like reports to LOOK and have more of an eye to functionality.

* Programmer - Programmers write or change programs. They might create web applications for employees to fill in time cards or look up information. They can sometimes create reports, but lack the eye for usability. Programmers are typically very logical and direct. I personally remember working with a programmer who didn't know how to plug a Printer into his computer and get it working.

* Web Designers - Generally a bit of a mix between a marketing/graphic artist and a programmer. Web designers make really bad programmers and programmers make really bad web designers. The skill set and mindset are almost opposite (left brain vs right brain).

None of my customers would ever even think of hiring an auto mechanic - even if they did have a fleet of 20 or 25 company cars to keep on the road. We all know know that the mechanic would either sit on their hands doing nothing a lot of the time or make themselves look busy. It would be a total waste of time, especially if we had to equip them with tools and keep our own supply of spare parts.

Many, many companies do with IT staff exactly what they would never do with an auto mechanic.

We suggest that you educate yourselves on the differences between these various skills and find an outside organization (perhaps your accounting firm) to provide you with an arms-length review of the skill of your staff and the amount of work you should be getting from them.