Technology in Architectural Practice

Our outside accounting firm is suggesting to us that an all-inclusive tech budget of $8,000/seat for a professional firm is the norm. "All-inclusive" would be defined to include all annual hardware, software, printers/plotters/peripherals, subscription/maintenance/extended warranties, equipment leases, communications (telephone, personal cell/broadband reimbursements, Internet), collocation/cloud services, corporate website, cost of outside consultants, as well as your in-house dedicated tech staff.

I know that there is a lot of pressure to do more with less, while at the same time dealing with years of meager re-investment in tech, but I'm wondering how this compares with what others are seeing? It might also be useful to know the number of seats that you're dealing with, since I would expect it to be easiest for smallest firms to hold down their costs, while mid- to large-sized firms costs would be higher. FTR, I see our firm of 20 on the small- to mid-sized end of the scale.

Thanks,
Jim

-------------------------------------------
James Morgan, AIA, LEED AP
Principal & Director of Technology
Urban Design Associates
Pittsburgh PA
-------------------------------------------

Sounds high for sole practitioners.  For instance, once a website is established on WordPress, most people can maintain their website themselves, adding their own new pages, posts and the like.  Only when a structural style change is required, do you really require that to be an on-going maintenance item, other than perhaps $5 to $8/month to broadcast it on a host server provider. 

I think once you get to a size where you HAVE to have dedicated in-house IT people is when you move up into a whole higher atmosphere of expenditures, starting with probably $50k+ minimum to over a $100k a year for the main IT person, depending on what they do for you.  That would bankrupt most sole outfits.  And many smaller offices use LT versions of software, greatly reducing those costs, even with subscriptions, which are about 1/5th of full blown versions.

I just ordered a smoking new 64 bit computer with SSD and dual HHDs, 32GB RAM, excellent Xeon CPU, Quadro K4000 3GB graphics, MS Office, OS, and more from a high quality American custom computer maker for $3,181.  I suspect that most people pay a lot more for machines that do less.  I shopped the heck out of it.  However, I won't be doing that every year.  More like once every 5 to 6 years.  Us small firms have to "future-proof" our purchases, so I have a larger motherboard that will let me install another 32GB of RAM for about $292 (today's cost, which will probably reduce as time moves on), if and when I want to do that.  So, my once every 6 year computer buy works out to perhaps an average of $530/year, not including future RAM or replacement components, if necessary.  Still: a far cry from $8k/year.

In my opinion, a 20 person architectural firm is not small at all.  That's a huge overhead.  My hat's off to you, making it work.  That is $160,000/year that you have to earn just to let your people sit down and turn on their computers.  Glad us small firms don't have that hanging over our heads.  Our total gross yearly income could well only be a fraction of just that one line item on your budget.  Once again: congratulations for making that work.  You must be a very successful company with lots of clients and good staff. All my best.

-------------------------------------------
Rand Soellner AIA
Architect/Owner/Principal
Home Architects
Cashiers NC
-------------------------------------------

Jim:

I took a look at our budget and for this year we have budgeted just over $7800 per FTE, not including capital spending; for 2012 we have budgeted another $2000. The budget was planned with 32.75 FTE for this year. Capital spending might be higher this year because we didn't spend much in the last several years.

 I have an innate dislike applying of "averaged" metrics without understanding the range of responses. Can your accountant give you the information indexed by firm size, revenue or broken down by quartile, etc? 

We are convinced that out investment in technology permits us to do more with fewer people.

Rich

-------------------------------------------
Richard Speicher AIA
Principal / Treasurer
Weber Murphy Fox
Erie PA
-------------------------------------------



Original Message:
Sent: 03-27-2013 09:55
From: James Morgan
Subject: Technology budgets - cost per seat?

Our outside accounting firm is suggesting to us that an all-inclusive tech budget of $8,000/seat for a professional firm is the norm. "All-inclusive" would be defined to include all annual hardware, software, printers/plotters/peripherals, subscription/maintenance/extended warranties, equipment leases, communications (telephone, personal cell/broadband reimbursements, Internet), collocation/cloud services, corporate website, cost of outside consultants, as well as your in-house dedicated tech staff.

I know that there is a lot of pressure to do more with less, while at the same time dealing with years of meager re-investment in tech, but I'm wondering how this compares with what others are seeing? It might also be useful to know the number of seats that you're dealing with, since I would expect it to be easiest for smallest firms to hold down their costs, while mid- to large-sized firms costs would be higher. FTR, I see our firm of 20 on the small- to mid-sized end of the scale.

Thanks,
Jim

-------------------------------------------
James Morgan, AIA, LEED AP
Principal & Director of Technology
Urban Design Associates
Pittsburgh PA
-------------------------------------------

Thanks for the post with the consultants opinion.  This seems  high as an ongoing cost per year/seat. A start up cost would certainly exceed the $8,000. The benchmark I have seen for ongoing expense puts the hardware, etc. cost at about $3,200. per employee (same as seat?) per year  and the labor more dependant on net recievables, at about .01 total cost of net recievalbles. The total then varies wildly and the $8,000. or even higher may indeed be right for certain larger organizations. Certainly as you note, you can keep costs significantly lower than this depending on your need for services and the type of organization you have. 

-------------------------------------------
Robert Schilling AIA
Champlin Architecture
Cincinnati OH
-------------------------------------------