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Is your IT company going bust?

Lantech Jan 4, 2023 3:26:52 PM
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Is your IT company going bust?

No apologies for throwing that question straight at you. Your own business could be thriving – financially secure – but if your IT provider is on dodgy ground, you could be too.

Imagine being unable to access your email or critical documents. Imagine you’re hacked and can’t process orders, take payments or manage your stock. Imagine a technical glitch stops you solving a customer’s query and, yet, when you call your IT provider’s helpdesk, there’s no answer.

We are trying to frighten you. Again, no apologies. This is scary stuff, but it can’t be ignored. We are facing a recession. Global markets are softening. If your IT provider isn’t making money, they can’t invest, they have no means of weathering storms, and everything is pared to the bone.

Checking the health of your IT provider isn’t being nosey. It’s a basic precaution that should be part of your business planning.

If the worst happens?

If your IT company goes into liquidation, you could face all the following:

  • Loss of access to your online systems such as email, files and productivity tools
    • No access to backup systems
    • No support for end users or critical systems
    • Loss of critical cyber security protection
    • Loss of knowledge

And you’ll have the challenge of having to find a new partner quickly.

Unfortunately, in recent weeks some smaller IT providers have gone out of business. It’s left their clients with an unwelcome mess that needs sorting. Urgently.

One of our new clients knew something wasn’t right with their previous IT provider. They were already searching for a new provider when, suddenly, their Microsoft licensing for email, SharePoint, Teams and OneDrive all disappeared. Their IT provider had gone into liquidation. Fortunately, we’re able to rescue the situation immediately.

Why are IT companies going bust?

With IT a business essential, you might think that IT companies have no problems. The truth is that lots do.

Many IT companies are run as lifestyle businesses which rely heavily on projects and don’t plan for the longer term. Once the projects dry up, they find it very hard to make money from the support function and it’s often too late to rescue the business.

Other support businesses have jumped on the cheap money bandwagon. Aggressive growth has been supported by borrowing, but now, with rising interest rates, repayments are crippling. They’re trying to survive by ramping up their fees. Some are merging with other businesses, hoping for economies of scale, but are dogged by the inevitable merger woes.

The signs of trouble

It’s not that hard to find out if your IT provider is struggling. Pointers include:

  • Staff being let go
  • Inconsistent support
  • Response times increasing
  • Inability to deliver projects

You can also check their credit score. Try Vision-net in Ireland or Experian in the UK. Look out for any court judgements. You can also download copies of their filed accounts.

It doesn’t take long to check things out. A few minutes could put your mind at rest or show you that you need to act.

Don’t ignore this. If you need some help, just ask us.

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