Over the past 17 years, we’ve met with hundreds of Vancouver Island’s business leaders and the cost of IT services is always top-of-mind. Small-to-medium sized businesses are either in a position where they are spending too much and not getting results, or they aren’t allocating any resources to technology and IT has little impact. In both scenarios, there is a lack of clarity on IT spending and generally, poor value associated to IT. This is problematic due to the continued reliance on technology for organizations to function and compete.
So, let’s unpack 3 key business IT expenses.
- Real Technology Costs
Firstly, let’s start with the obvious: hardware. It’s now a common business standard to replace computers every 3 to 4 years. Less obvious expenses include centralized tools and automation, such as backup and disaster recovery, anti-virus, patch management and so on. With a managed service provider, the average small-to-medium sized business can budget for hardware upgrades and reap the benefits of centralized tools for a fraction of the cost.
- Labour Costs
Whether you have an in-house IT department or employee or outsource, labour will most likely be your biggest expense. We’ve discussed the cost-savings of external IT vs. internal IT in-depth in the past. With an outsourced company, you can take advantage of the best IT talent. You can free up internal labour resources by enabling your team to focus on what your organization does best. A managed service provider has the tools and the expertise to do the work faster and cost-effectively.
- Mitigating Risk
One of the most common reasons businesses invest in good IT is to prevent risk. We can consider a multitude of “what if” possibilities that can result in lost profits. For instance, investing in a robust backup is a mere drop in the ocean compared to the actual cost of a successful ransomware attack. Or, providing annual phishing awareness education to employees is nothing compared to the cost of a phishing scam. But we can also drill down and investigate isolated networking issues affecting your organizations bottom line that can result in lost productivity. In these situations, the business owner understands that “time is money.”
Having a clear understanding of your IT spending will help you better understand the impact your investment has on your success. As we become more and more reliant on technology to stay competitive, we will have to adapt our approach to IT spending.