If your IT strategy is "call someone when something breaks," you're not alone. Most SMEs across New Zealand operate this way. It's called break-fix IT, and it feels cheaper because you're only paying when there's a problem.
Except it's not cheaper - not even close.
The real cost isn't on your invoices. It's hiding in downtime you can't predict, productivity you're losing while problems get fixed, and opportunities you can't pursue because your infrastructure can't support them.
Let's add it up properly.
When your server suddenly goes down, you're not just paying for the emergency callout. You're paying for every person who can't work while it gets fixed, every customer transaction that doesn't happen and every deadline that gets pushed.
Here's what one day of unplanned downtime actually costs for a business doing $1 million in annual revenue with 20 staff:
|
Cost Category |
Estimated Range |
|---|---|
|
Lost revenue |
$4,000-$8,000 |
|
Lost productivity (staff idle at $50-75/hr) |
$2,000-$3,000 |
|
Emergency IT support |
$500-$2,000 |
|
Total for one day |
$6,500-$13,000 |
That's not counting the reputational damage when customers can't reach you, the stress on your team, or the cascade of delayed work that follows.
Now multiply that by how many times per year you experience unplanned outages. Twice? Three times? More?
Most SMEs we work with experience 2–4 significant downtime events per year with break-fix IT. That's $13,000–$52,000 in costs that never appear on an invoice but absolutely hit your bottom line.
Worth pausing here: when your business last went down, who made the call to fix it - and who was accountable for the cost? If the answer is "it just got dealt with," that's not a process. This is what we would call "lucky".
Downtime is obvious. Productivity loss is insidious because it happens slowly, constantly, and nobody ever adds it up.
Here's what it looks like in practice:
Your CRM is running slow today - not broken, just slow. Each person loses 5–10 minutes per day waiting for pages to load. Across 20 staff, that's 100–200 minutes of productive time lost. Daily.
Your file server keeps disconnecting, people work around it by emailing files or saving to local drives. Now nobody knows which version is current, someone spends 30 minutes hunting for the right file, and this happens multiple times per week across your team.
Access isn't set up properly. Half your team shares one login because setting up proper user accounts "hasn't been a priority." Security risk aside, this creates bottlenecks, confusion, and wasted time.
Systems don't talk to each other. Your sales team updates data in the CRM, Finance updates the same information in their spreadsheet and someone has to manually reconcile them weekly - that's 3–5 hours of double-handling that shouldn't exist.
Conservative estimate: If each person on your team loses just 15 minutes per day to IT friction - slow systems, workarounds, access issues, manual processes that should be automated - that's:
20 staff × 15 minutes × 250 working days = 1,250 hours per yearAt $75/hour average = $93,750 in lost productivity annually
And that's a conservative estimate. Most teams lose more than 15 minutes a day to IT friction.
The CFO question nobody asks: this $93,750 doesn't show up on any report. It's absorbed into salary costs, written off as "just how things are." If a supplier was billing you $93K a year for nothing in return, you'd cancel the contract. What's different here?
This one's harder to quantify but often the most expensive.
Growth constrained by infrastructure. You want to offer a new service, open a second location, or scale up operations - but your current IT setup can't support it. So you delay. Your competitor doesn't. They capture the market opportunity while you're still "figuring out the IT side."
Contracts you can't bid on. That enterprise client requires ISO 27001 compliance or specific security standards. You can't demonstrate compliance because your IT security is ad-hoc. You can't bid. Revenue opportunity: gone.
Talent you can't attract or retain. Top talent expects modern tools, flexible work arrangements, and systems that actually work. If your IT environment is ten years behind, you're either not attracting good people or losing them to competitors who offer better infrastructure.
Customer experience you can't deliver. Your customers expect certain digital capabilities - online ordering, real-time updates, integrated support. If your systems can't support that, you're losing business to competitors who can.
For a $2M business that could be growing at 15% but is only growing at 5% due to infrastructure constraints, that's $200K in foregone revenue growth annually.
The leadership question: if your IT infrastructure is constraining growth, that's not a technical problem anymore. It's a strategic one. Who in your business is responsible for fixing it?
Let's put this together for a typical 20-person SME doing $1.5M–$2M in revenue:
|
Cost Category |
Annual Cost (Conservative) |
|---|---|
|
Unplanned downtime (3 incidents/year) |
$20,000–$40,000 |
|
Productivity loss (15 min/day per person) |
$70,000–$95,000 |
|
Emergency IT callouts (premium rates) |
$8,000–$15,000 |
|
Missed opportunities (contracts, growth) |
$50,000–$200,000 |
| Total Hidden Cost | $148,000–$350,000 |
And here's the kicker: most of this never shows up as an IT expense. It's just absorbed as "the cost of doing business."
But it's not - it's the cost of reactive IT.
The accountability question: look at that total. Now ask yourself - does anyone in your business actually own that number? Most SMEs have a finance person who owns the P&L, a sales person who owns revenue, an ops person who owns delivery. Almost none have someone who owns the cost of IT friction. That gap is expensive.
Now let's put the reactive IT number in context.
A managed IT engagement typically costs a fraction of what reactive IT is silently costing you - often somewhere between 20–40% of the hidden cost total above, depending on the size and complexity of your environment.
What you get for that is a fundamentally different model: 24/7 monitoring and proactive issue resolution, regular maintenance and security patching, predictable fixed monthly costs with no surprise invoices, strategic IT planning and capacity management, help desk support for your team, and backup and disaster recovery.
In other words: the question isn't whether managed IT is expensive. It's whether it's more expensive than what you're already paying - just invisibly, and without getting anything back for it.
The math on your specific business is something we can work through together. But for most 20-person SMEs, the numbers aren't close.
If the math is this clear, why do so many SMEs stick with break-fix IT? The honest answer isn't that they haven't done the math. It's that reactive IT is a risk most businesses are absorbing quietly - without ever deciding to.
"It feels cheaper in the moment." A $2,000 emergency callout feels manageable. What doesn't get calculated is the compounding cost of three of those a year, plus lost productivity, plus the growth that didn't happen. Break-fix IT isn't a cost decision - it's a risk decision. Most businesses just don't frame it that way.
"The hidden costs are invisible." You don't get an invoice for "productivity lost to slow systems." So it doesn't feel like a cost. But not seeing something on a report doesn't mean it isn't happening. It means it's unmanaged.
"Change feels risky." Moving to an MSP means trusting someone else with your infrastructure. This is a legitimate concern and the right answer isn't to dismiss it. It's to ask whether the risk of changing is genuinely higher than the risk of staying where you are. For most SMEs running on break-fix IT, it isn't.
"We'll deal with it next quarter." This is where most businesses actually live. Not disagreeing with the argument - just not acting on it. The problem is that every quarter you stay reactive is a quarter you're paying the hidden cost. There's no neutral position here.
We've had this conversation with hundreds of SMEs across New Zealand. The ones who delay rarely do it because the economics don't make sense. They do it because nobody has been given clear ownership of the decision.
That's the conversation worth having.
The shift from reactive to proactive IT isn't just about preventing problems - though that's a big part of it. It changes the role IT plays in your business entirely.
Predictable costs. You know what IT costs every month. You budget for it like rent. No surprise invoices. No emergency rates. No scrambling to find budget when something critical fails.
Less firefighting, more focus. Instead of your team - or you - constantly context-switching into IT problems, someone else is handling that. You get back hours every week to focus on running your business.
Infrastructure that enables growth, not constrains it. When you want to scale, open a new location, or launch a new service, IT isn't the bottleneck. Your infrastructure can support growth because someone's been planning for it.
Better security as a baseline, not an afterthought. You're not hoping your defences are good enough. You've got monitoring, patching, and people watching for issues before they become incidents.
Competitive advantage that compounds. While your competitors are still dealing with IT fires, you're operating smoothly. The gap between businesses that have sorted their IT and those that haven't gets wider every year.
Not every business needs a full MSP engagement. Here's how to know if it makes sense for you.
You should seriously consider an MSP if:
You've had 2+ significant downtime events in the last year
Someone on your team spends 10+ hours per week dealing with IT issues
You can't quickly answer basic questions about your environment - what's patched, what's backed up, what's vulnerable
You're avoiding growth opportunities because IT infrastructure can't support them
Your team is regularly frustrated with slow or unreliable systems
You're worried about security but don't have the in-house expertise to manage it
Your IT costs are unpredictable and often involve emergency callout rates
You might be okay without an MSP if:
You have a dedicated, skilled internal IT team with genuine capacity for both reactive and proactive work
Your infrastructure is modern, well-maintained, and properly documented
You have monitoring, backup, and security processes actively in place
Your IT costs are predictable and aligned with business needs
Your team isn't losing meaningful time to IT friction
Honestly? Most SMEs fall into the first category, not the second.
If you've read this and thought "that's us" - here's how to move from recognition to a decision.
Option 1: Run the numbers yourself. Use the framework above against your own business. How many downtime events last year? How many staff? What's your average hourly cost? The numbers usually make the decision clear without any outside input.
Option 2: Have us do it with you. We run a free 20-minute IT Cost & Risk Assessment - a structured conversation that maps your current IT setup against what it's likely costing you, where the gaps are, and what proactive IT would change. We've been doing this for 20+ years across hundreds of Kiwi businesses. We know how to have the commercial conversation, not just the technical one.
Option 3: Stay where you are, but own that decision. That's a legitimate choice. Just make it deliberately. You now know what reactive IT costs and why businesses stay in it anyway. If the status quo is genuinely acceptable for where your business is right now, that's a valid call. But it's a decision - not a default.
The question isn't whether reactive IT is costing you. It's whether anyone in your business is accountable for that cost - and whether you're ready to change that.
Book your free 20-minute IT Cost & Risk Assessment →
We look at your current setup, map the likely cost of staying reactive, and give you a clear picture of what proactive IT would change - for your business specifically.
Call us: 0508 01 01 01