I recently took some time out with my family for school holidays and I am pleased to say I spent plenty of time laughing with the kids and doing fun stuff. OK, so the rollercoasters weren’t free, and neither were the physio bills to realign my neck, but the best bits were simply being there with the kids.
Now I am back to work and I am reminded every day that IT is not free. Right now, many people wish it was free and are driving to reduce spending on infrastructure, licensing and services. The focus has largely swung from investment for growth to cost reduction to reduce spending.
This is leading to increasing risk in IT systems. We are seeing an increase in average age of equipment across the SME business sector, where BYOD has people working on the latest tablets and mobile devices, even some nice laptops and ultrabooks, but the core infrastructure is now creaking and failures are increasing.
Many of the people I am speaking with who make the business decisions agree with me that proactive measures reduce the total cost of ownership, but in the next sentence say that you can’t spend what you don’t have. This is leading to many false economies.
For example, this week I visited a property management company with 20 staff working at six-year-old computers on a server system that is out of storage capacity. The down time and poor performance this company is putting up with is painful to observe. It is great for the community to keep all 20 staff employed, but the business is suffering financially and needs to make changes.
An upgrade to the latest property management software and stable, fast infrastructure could lead to getting the same work done by 15 people. The cost reductions of the five reduced staff will cover the cost of the new systems required in less than five months. Leasing the equipment licensing and services costs will remove the capital expenditure issue and the company will be able to fund the exercise over 48 months, creating positive cashflow in the process. It will also create a real return on investment, not just improved cashflow.
When IT is an enabler for business and is treated as an investment it should create its own value. If you only see IT expenditure as a necessary evil, perhaps it is time you paused and looked at how investing in the right technologies could drive the financial success of your business. A good way to do this is to look at metrics for your industry based on best practice. What systems let you service more properties with fewer staff? What software lets you process more invoices in less time? What new technology solution reduces overheads by 30%? There are solutions out there for almost any industry that will impact your bottom line positively.
David Markus is the founder of Combo – the IT services company that ensures IT is never an impediment to growth.