--- title: 4 Common mistakes – While understanding IT Department Cost description: "IT Strategy, IT Process, Business Strategy, Revenue, Technology Impact, Payroll, Technology Cost, IT Alignment,\nCompetitive; COVID-19; Coronavirus" image: https://encsolutions.ca/hubfs/Canva%20images/Add%20a%20subheading.png --- [![ENC Logo HEADER](https://encsolutions.ca/hs-fs/hubfs/ENC%20Logo%20HEADER.png?width=290&height=38&name=ENC%20Logo%20HEADER.png "ENC Logo HEADER")](https://encsolutions.ca/) [![ENC Logo HEADER](https://encsolutions.ca/hs-fs/hubfs/ENC%20Logo%20HEADER.png?width=290&height=38&name=ENC%20Logo%20HEADER.png "ENC Logo HEADER")](https://encsolutions.ca/) - [What we do](https://encsolutions.ca/what-we-do) - [How we work](https://encsolutions.ca/how-we-work) - [IT Department](https://encsolutions.ca/it-department) - [Co-Managed IT Dept.](https://encsolutions.ca/co-managed-it) - [Careers](https://encsolutions.hiringplatform.ca/list/careers) - [Blog](https://encsolutions.ca/blog) - [Contact](https://encsolutions.ca/contact-us) - [What we do](https://encsolutions.ca/what-we-do) - [How we work](https://encsolutions.ca/how-we-work) - [IT Department](https://encsolutions.ca/it-department) - [Co-Managed IT Dept.](https://encsolutions.ca/co-managed-it) - [Careers](https://encsolutions.hiringplatform.ca/list/careers) - [Blog](https://encsolutions.ca/blog) - [Contact](https://encsolutions.ca/contact-us) # 4 Common mistakes – While understanding IT Department Cost [Gurmeet Judge](https://encsolutions.ca/blog/author/gurmeet-judge) Jul 21, 2020   As we start stage 3 of reopening businesses in Ontario, most business leaders are striving for [higher production levels](https://encsolutions.ca/blog/itimpactonrevenueandcustomerservice)without compromising health and safety. Increasing [revenue levels](https://encsolutions.ca/blog/technology-impact-on-revenue) and controlling [operational cost](https://encsolutions.ca/cost_hardsoft) is more critical than ever for any business leader.   Coronavirus continues to dominate every conversation as we all struggle to deal with the[magnitude of the pandemic](https://encsolutions.ca/blog/technology-impact-on-business-after-covid-19). However, amidst such chaos and discussions also lies an unparalleled opportunity to usher in transformational changes to the various sectors spread across. ![Add a subheading](https://encsolutions.ca/hs-fs/hubfs/Canva%20images/Add%20a%20subheading.png?width=313&name=Add%20a%20subheading.png) As t[echnology investment](https://encsolutions.ca/blog/symptoms-of-lower-return-from-it-investments) in business kept operations alive when everything else was shut down, most business leaders considering technology to be very critical item for their [revenue growth](https://encsolutions.ca/blog/not-getting-expected-results-review-your-approach-to-it-decisions) strategy, but many hesitate to invest because of economic uncertainty. Here are few facts to understand technology/IT [operational cost](https://encsolutions.ca/blog/understanding-soft-cost-of-technology-it): - Technology cost is small cost compare to other business expenses, but it impacts the most two critical items in business – [payroll and revenue](https://encsolutions.ca/blog/impact-of-it-decisions-on-your-revenue-payroll-profit) - IT Operational cost is unavoidable but business [soft cost](https://encsolutions.ca/blog/understanding-soft-cost-of-technology-it) or impact on payroll/revenue can be measure and minimized. - [Hard cost](https://encsolutions.ca/cost_hardsoft) is easy to calculate but [soft cost](https://encsolutions.ca/blog/understanding-soft-cost-of-technology-it) is complex, bit difficult to calculate - What you can measure, calculate, easy to control – soft cost is hard to control - IT Soft cost is many times higher than hard cost; controlling soft cost makes business operations lean and provide [competitive advantage](https://encsolutions.ca/blog/how-to-manage-change-in-it-operations). All business leaders will agree that [payroll cost](https://encsolutions.ca/blog/technology-it-impact-on-payroll) is biggest expense in any business, but most business leaders don’t consider this item while considering IT department cost.   **Here’s top 4 mistakes when understanding IT Department Cost:** - **IT Staff Time**: If you have [IT Department](https://encsolutions.ca/blog/business-and-technology-risks-expectations-vs.-reality-0) or IT Staff, their salary, overtime, training, bonus all should be part of IT Cost. IT Department payroll cost needs to consider while understanding complete [IT department cost](https://encsolutions.ca/blog/understanding-soft-cost-of-technology-it) not just hardware and software cost. - **Non-IT Staff Time**: Staff in other departments than IT, how much time they are spending [coordinating](https://encsolutions.ca/blog/credibility/trust-in-your-it-department-expectations-vs.-reality) with IT department, waiting for IT tasks, On-boarding/Off-boarding Time. An estimate time spent on IT support calls, tickets and average close time should be translated financial impact should also needs to be consider as part of IT cost. - **Leadership Time**: How much time is invested in [IT meetings](https://encsolutions.ca/blog/it-documentations-why-you-cannot-keep-it-up-to-date), decision making process, communication and research time? Business leaders time usually equals to most critical [financial impact](https://encsolutions.ca/blog/how-to-find-critical-information-for-decision-process). Approximate time required for business leader to manage IT Department and soft cost should be part of IT Department cost - **Mistakes and Wrong decision**: Finally, time spent or wasted in wrong decisions. Mistakes, wrong decisions or lack of decision all waste time in [IT Department](https://encsolutions.ca/blog/understanding-soft-cost-of-technology-it). All mistakes in business have high financial impact. An estimate of past mistakes or wrong decisions and financial impact on [business revenue](https://encsolutions.ca/blog/1-reason-why-leaders-struggle-with-business-decisions) and/or payroll should also be considered as part of IT Operational commitment.   **Need Help?** Schedule time for quick [discussion here](https://encsolutions.ca/meetings/gjudge) [Productivity](https://encsolutions.ca/blog/tag/productivity), [Business Risks](https://encsolutions.ca/blog/tag/business-risks), [Revenue](https://encsolutions.ca/blog/tag/revenue), [IT Process](https://encsolutions.ca/blog/tag/it-process), [Business Impact](https://encsolutions.ca/blog/tag/business-impact), [Hard Cost](https://encsolutions.ca/blog/tag/hard-cost), [IT Strategy](https://encsolutions.ca/blog/tag/it-strategy), [Technology Cost](https://encsolutions.ca/blog/tag/technology-cost), [Covid-19](https://encsolutions.ca/blog/tag/covid-19), [Coronavirus](https://encsolutions.ca/blog/tag/coronavirus) ## Related Posts [![](https://encsolutions.ca/hs-fs/hubfs/Stock%20images/Hardworking%20businesswoman%20concentrating%20on%20her%20work%20as%20she%20sits%20paging%20through%20a%20binder%20of%20paperwork%20at%20her%20desk%20in%20the%20office.jpeg?width=352&name=Hardworking%20businesswoman%20concentrating%20on%20her%20work%20as%20she%20sits%20paging%20through%20a%20binder%20of%20paperwork%20at%20her%20desk%20in%20the%20office.jpeg)](https://encsolutions.ca/blog/3-key-metrics-to-measure) [Productivity](https://encsolutions.ca/blog/tag/productivity) Jul 21, 2020 ### [Business Impact of Technology: 3 Key Metrics to Measure](https://encsolutions.ca/blog/3-key-metrics-to-measure) Understanding the value contributed by your [IT department](https://encsolutions.ca/blog/business-and-technology-risks-expectations-vs.-reality-0) is a crucial part of running your... [Read More](https://encsolutions.ca/blog/3-key-metrics-to-measure) [![](https://encsolutions.ca/hs-fs/hubfs/Stock%20images/Happy%20man%20with%20thumbs-up%20leading%20a%20successful%20business%20team.jpeg?width=352&name=Happy%20man%20with%20thumbs-up%20leading%20a%20successful%20business%20team.jpeg)](https://encsolutions.ca/blog/business-and-technology-risks-expectations-vs.-reality-0) [Productivity](https://encsolutions.ca/blog/tag/productivity) Jul 21, 2020 ### [Business Impact of Delayed IT Decisions](https://encsolutions.ca/blog/business-and-technology-risks-expectations-vs.-reality-0) If you have a [growth mind](https://encsolutions.ca/blog/technology-impact-on-revenue) set and have goals and [objectives](https://encsolutions.ca/blog/3-ways-to-it-strategy-and-roadmaps) to reach, your most precious resource... [Read More](https://encsolutions.ca/blog/business-and-technology-risks-expectations-vs.-reality-0) [![](https://encsolutions.ca/hs-fs/hubfs/Stock%20images/Smiling%20friendly%20handsome%20young%20male%20call%20centre%20operator%20or%20client%20services%20personnel%20beaming%20as%20he%20listens%20to%20a%20call%20and%20checks%20information%20on%20his%20computer%20monitor.jpeg?width=352&name=Smiling%20friendly%20handsome%20young%20male%20call%20centre%20operator%20or%20client%20services%20personnel%20beaming%20as%20he%20listens%20to%20a%20call%20and%20checks%20information%20on%20his%20computer%20monitor.jpeg)](https://encsolutions.ca/blog/simplify-your-it-department-decisions-objectivity-vs-subjectivity) [Productivity](https://encsolutions.ca/blog/tag/productivity) Jul 21, 2020 ### [Simplify Your IT Department Decisions - Objectivity vs Subjectivity](https://encsolutions.ca/blog/simplify-your-it-department-decisions-objectivity-vs-subjectivity) As a business leader you are constantly [making decisions](https://encsolutions.ca/blog/business-and-technology-risks-expectations-vs.-reality-0)—often under pressure.  These decisions... [Read More](https://encsolutions.ca/blog/simplify-your-it-department-decisions-objectivity-vs-subjectivity) [![ENC Logo Footer](https://encsolutions.ca/hubfs/ENC%20Logo%20Footer.png)](https://encsolutions.ca/) At Encompass, we foster a culture of accountability and customer advocacy. We set high expectations and target dates and we keep our promises and commitments to our customers and co-workers. 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