When Callum Prest became general manager of Nortex Building Supplies in 2022, he inherited an IT environment that had grown by accretion over 14 years. There were three separate accounting software licences — a legacy of two acquisitions that had never been properly integrated. There were maintenance contracts with four different vendors, each covering a different subset of the firm's 22 servers. There was a managed print contract that nobody could clearly explain. And there was a part-time IT coordinator whose role had expanded to include "anything technology-adjacent," including the phone system, the security cameras, and the warehouse management terminal.
Total IT expenditure for financial year 2022–23: $618,000 for a business with 85 staff and $28 million in annual revenue. That is 2.2 percent of revenue, against an industry median of 1.4 percent for comparable wholesale distribution businesses, according to KPMG's 2024 Australian Mid-Market Technology Benchmarking Survey.
"We knew it was too much," Prest said. "We just didn't know where the waste was."
Mapping the real cost baseline
The first task when Nortex engaged Adelaide-based MSP Apex IT Solutions in early 2023 was a cost discovery exercise — not a pitch, but an audit. Apex catalogued every IT vendor, every licence, every contract term and renewal date, every support agreement. The output was a consolidated IT cost register that Nortex had never previously had in one place.
The findings were instructive. Nortex was paying $2,400 per month for Microsoft 365 licences at a per-user rate that predated volume discounts available under current pricing tiers — renegotiating the agreement reduced that bill to $1,650. One of the three accounting platforms had not been actively used since 2021 but continued to attract a $14,000 annual support contract because no one had formally decommissioned it. Two of the four server maintenance contracts covered equipment that had already been retired to a storage room. Cancelling them saved $18,500 in the first year.
These were not sophisticated findings. They were findings that required someone to sit down with the invoice register and cross-reference it against actual infrastructure. That task had simply never been prioritised.
The downtime cost that doesn't appear on invoices
Direct licence and contract rationalisation accounted for approximately $67,000 in annualised savings at Nortex. The larger value, harder to calculate but more significant in aggregate, came from reliability improvements.
Gartner estimates the average cost of IT downtime across industries at $5,600 per minute for enterprise environments. For mid-market businesses, the figure is lower but still substantial: an analysis by Datto, the backup and disaster recovery vendor, put median downtime costs for Australian SMEs at between $8,000 and $15,000 per hour when lost productivity, emergency response costs, and delayed order fulfilment are included.
Nortex had logged three significant outages in the 18 months prior to the Apex engagement: a storage array failure that took the warehouse management system offline for four hours, a networking incident that disrupted the point-of-sale terminals at two trade counters for most of a morning, and a ransomware infection that encrypted a file server and required two days of recovery work from backup. The firm's own estimate of the combined impact was $74,000 in direct costs and lost orders.
In the 18 months following the Apex engagement, Nortex recorded zero unplanned outages lasting more than 30 minutes. Apex's proactive monitoring had flagged and replaced two failing hard drives before they caused failures, identified a misconfigured backup job that had been silently failing for three months, and caught an early-stage malware infection through endpoint detection tooling before it spread.
Building the ROI model
The total cost of the Apex engagement in year one was $112,000, covering the initial audit, infrastructure remediation work, and the ongoing monthly managed services agreement at $7,200 per month. Against a baseline IT spend of $618,000, that represented additional expenditure in the first year as transition and setup costs were absorbed.
By year two, the picture was materially different. Licence rationalisation, contract consolidations, and the elimination of the legacy server maintenance agreements had reduced the infrastructure cost base by $94,000 annually. The part-time IT coordinator, freed from reactive break-fix work, was redeployed into a business systems analyst role supporting the ERP implementation the firm had deferred for three years. The annualised managed services fee of $86,400 replaced approximately $130,000 in prior support contract costs.
Prest's internal calculation for the board presentation in October 2024 showed a two-year net benefit of $186,000 against the cost of the engagement — a figure that excluded the avoided downtime costs, which he treated as conservative upside rather than a guarantee.
The more durable change, he suggested, was organisational. Nortex now has a single vendor relationship for IT, a monthly service review that surfaces emerging issues before they become costs, and for the first time a technology roadmap aligned to the company's three-year growth plan. "The savings got us started," Prest said. "The roadmap is what convinced the board it was the right long-term decision."