Cast your mind forward 5 years. Will we still send so many emails? Will we be satisfied with a keyboard to fill in web forms and use passwords to log on to secure systems? The changes in speed of access and capability are coming fast. As facial recognition, voice recognition, and biometrics develop, our concept of how we communicate with machines will change. The effect of cloud computing will drive down the cost of infrastructure and create new potential for business solutions.
There are smarter ways to drive down the risks associated with aging IT systems that are likely to add value to your business. The question is how much should you spend?
We have tried to set a guide based on a percentage of revenue, but that is too vague for many businesses where maintaining margins is hard work. Often a better answer lies in reducing waste or risk. First of all, it is important to understand your risk around IT involves loss of systems or loss of competitive edge in the marketplace. Then look to business processes with high cost and look for technology to reduce that waste and so reduce the cost per product.
That cost may be in marketing, sales, inventory, materials, or time. The savings will build the business case for spending on IT.
Building a Business Case
There are some clear costs to IT that you can work into your business case. If you are using PCs, servers, and mobile devices, there is a cost to buying them and maintaining them. This may be a fixed cost if outsourced or a variable cost if you buy the equipment as needed. PCs will vary from a few hundred dollars to a few thousand, depending on the demands you are placing on them, from an email station running a couple of small spreadsheets to a workstation running 3D design tools. You should anticipate three to four years of performance from the right PC, but to stretch it further will have hidden costs in increased downtime, maintenance costs, and poor performance relative to newer machines.
For each new starter in your business you need to factor in the annual cost of a PC, a device, and software, and if you are using the cloud, factor in monthly fees. Again, these will vary from application to application, but you should be able to figure out what your costs will be. There is also the cost of supporting each person in your business in terms of their IT tools, which will either be a direct cost or a hidden cost. The costs are hidden when you have no formal support arrangement and your staff waste productive time fixing their own IT problems or working around them. Direct costs are usually lower than hidden costs because problems are fixed efficiently. Management of an individual’s IT environment will cost from a few hundred dollars a year to a few thousand depending on the complexity of the systems being used.
Dealing with Growth
If your business is increasing staff you may need to revisit your infrastructure strategy and change how you share, store, and protect your data. As you add employees, you will need larger, more expensive systems unless you have adopted a scalable cloud solution that allows you to simply add one more team member to the account. Of course, not all applications have a cloud version yet, so you may need to invest in a hybrid solution with some servers and some cloud storage.
The more you can push to the cloud, the less capital expenditure you will need to budget for, but keep an eye on the comparison costs over a four-year period. Many cloud solutions are cost effective for the enterprise but not for the smaller business. For a fast-growing start-up, the cost of the cloud is not the issue as it is all about the freedom to grow without the need for expensive upgrades.
Understanding your business and getting the right advice on suitable technologies may give you the advantage you are looking for. When your business is growing is the perfect time to reconsider your IT needs, and taking professional help is never a bad idea. Current Technologies has been helping companies manage growth for over 20 years. Our team is well versed in today's technology, where it will be in the future, and how to apply this information to your business.