IT: To Spend or Not to Spend?

Susan Shapiro, Bralan Consulting
Whether you’re a startup or an established business, you need to decide what technology to spend money on to support your business.
Well, first you need to decide if you want to own your hardware and software – which includes maintenance, upgrades and troubleshooting, or whether you want someone else to manage those headaches.
In making this decision you need to consider the following:

  • If you own your own hardware and software you need to have the support personnel and the budget available to manage it.
    For hardware this includes upgrading equipment as it becomes outdated (often within a year), solving crashes, ensuring backup of all information and the ability to recover your operations quickly in case of an emergency – also known as continuity of business.
    For software this includes ensuring that you have the latest versions – this will require a cash outlay to upgrade as new versions are released – including updated anti-virus software, a secure firewall, etc.

  • As an alternative to bringing ownership in-house, you can choose to contract with a software as a service company. This solution means that the software will be owned and maintained by the provider you choose who will ensure that the latest versions of software are upgraded and maintained in a secure environment.
  • Another option is to remove all hardware and software concerns by choosing a thin client solution. With this option hardware is not owned by the company and is replaced regularly based on new standards. Latest versions of software are made available, while keeping previous versions of software for backward compatibility testing. And the need to worry about versions of hardware drivers are completely removed.

In order to make the correct decision for your company, you need to review your business plan. Does your plan involve providing in-house technology support and, if so, who will provide the support? Unless you hire someone specifically to do this, you may not be using your employees’ time and your company’s earnings wisely. For example, a partner who bills by the hour is probably not best suited to removing the latest virus threats from the company computers. So, unless you plan to have an IT department you may want to think about outsourcing your PC support to a professional who can take the guesswork out of computer problems or, as discussed previously choosing a thin client solution. Alternately, you may wish to contract with a managed service provider, similar to outsourcing your IT department. Managed service providers offer various plans to choose from, including 24/7 access to tech support as well as remote monitoring and maintenance of your network.
Once you understand how your technology needs fit in to your business plan you may want to consider hiring a technology consultant – just like you hire a plumber to fix leaks, a technology consultant can provide you with the expertise to address problems. In this case, you should consider entering into a long term contract, providing for ongoing maintenance to minimize potential problems thereby reducing expenses.
In deciding whether or not to buy your IT solution, there are many factors to consider:

  • Is that purchase going to make the next sale happen or going to keep the business going, or is it a cash drain on the business?
  • Are there hidden costs – integration, added requirement not initially considered?
  • Are you sure the solution you’re considering is the best, most cost effective one to meet your business requirements – e.g., is your solution plug and play or do you need to make modifications before it works?

So now that you understand your technology plan as it aligns with your business plan you need to figure out what’s real and what’s hype.
As Howard Globus, Managing Partner of It-on-Demand, says, “Just because it’s in the movies doesn’t mean it’s necessary – or that it can happen. A customer once asked if he could have the types of machines he saw in a movie because they looked really cool. I asked him what he was trying to do and found his current systems were more than adequate; they just needed to be configured for his changing business needs. He didn’t need the 30” flat panel cinema monitors to process the applications his staff was taking in.”
Mr. Globus suggests you check and see who else is using the technology. Look to see if there is a proven track record; if it’s only in the high end segments of your industry or if it’s out there and being used. If not, it could be a good idea that hasn’t been explored yet. Talk to a technology consultant to see what makes sense for your business needs.
So, now that you’re getting closer to a decision you need to ensure that you’re not wasting money. Determine your core business, define what you are looking to get done and be ready to ask specific questions.
You need to understand what you are trying to get out of a technology solution, don’t try and over plan for growth (but DO consider growth) and don’t get too married to an idea until others have been explored and money savings are much more likely.
Once you’ve found what you believe is the right solution, discuss doing a pilot or a small test phase. As Mr. Globus notes, “Any company that wants to work with your business should be willing to do some small pilot phase. You are exposing the most sensitive information that you have about your business. You should feel comfortable that the solutions you are looking into will work for you and the relationship that you are fostering is one that fits. You may not get a fully installed system or get all the best ideas the tech has to offer, but a week or two test phase should give you a comfort level that the solution will meet your needs and that you can work with the company your are readying to contract with.”
Susan Shapiro.jpgSusan B. Shapiro is the owner of Bralan Consulting LLC. She assists you in finding the right technology for your needs, as well as teaching you to be efficient and comfortable with the technology you use.