In an ever more technologically focused business world, there is an increased pressure on IT budgets to go further. According to consultancy firm Alinena, small businesses currently spend, on average, 5-7% of their total annual revenue on IT services.
There are also hidden costs of IT to be mindful of, Samsung conducted a survey in 2016 and found that on average each employee spends 2 hours and 47 minutes on IT related issues each week, significantly harming productivity. The same study also found that 9 in 10 employees claim they regularly lost concentration at work, having to come to the aid of a colleague with an IT related issue.
There are other hidden costs which can come from a number of sources but the most common is sometimes referred to as ‘IT by the back door’.
How many SME businesses sign off on projects to implement software tools for a specific function (e.g. HR, Payroll, etc) using their departmental budget, but don’t consult with their IT team? We expect this is almost 100% to a greater or lesser degree.
Ultimately, the costs of signing off projects which have not been reviewed by IT can be much higher than expected, since no assessment for compatibility has been made and any integration issues could end up costing far more than anticipated because a few simple questions were not asked. (Not to mention this is very dangerous as IT by the back door can be a big problem to businesses – e.g. who knows what level of unstructured data sits on systems which are not compliant with regulation – e.g. GDPR – but that’s another topic!).
So, how can you keep a handle on IT costs whilst ensuring operational capability, staff productivity and of course maintaining security? As ever there isn’t a single answer to this question… However, by implementing a number or all of the below suggestions you can begin to get a better return for your IT budget.
5 Steps to Reducing IT Spend
Regularly review and consolidate where possible: As a business grows, naturally it’s IT requirements will change. At various times it is likely you will utilise more software and applications to run your business. It is useful to conduct a regular audit of your IT systems (annually is a good start) and identify if any products/services can be removed. You will be surprised how much software is paid for that is no longer used, even if only one or two licenses – it all adds up! Consolidate services to fewer suppliers. Much like your insurance, if you have several family members needing car/home/health insurance you have more clout with a supplier to drive a discount.
Move to the cloud – Hosting your data within secure virtual server environments is becoming more common as business demand changes. It is no longer cost effective, secure or productive to have physical services in your offices; they can be cumbersome for office moves; increase the risk of data loss by damage caused by overheating, fire, flood, etc; not to mention the capital cost of sourcing and implementing. Virtual servers and hosted desktops are an effective alternative. Your data is housed away from your office in secure data centres offering resilience (dual power supplies, backup services, etc) and control is centralised and costs usually fixed on a per user or per service basis. i.e. You can purchase the required services you need as your business grows, flexibility and at a known cost.
Outsourced IT Support – As Samsung’s study has shown, your staff are wasting too much time on often minor IT issues. Much better to utilise an expert who can solve the problem in fraction of the time, although it may seem an additional cost, packages can be flexible on a ‘call as you need us’ basis and the time saved by your employees will far outweigh the investment.
Embrace the idea of Multi-Cloud services – Applications such as email, Accounting, and Microsoft Office can be run from the cloud and, as you add users only when you need them, this flexibility ensures you’re not wasting money and can keep a clear eye on your costs.
Alternative Office Hardware – Of course it’s essential your IT equipment can perform the tasks required reliably, without issue, but there are smarter options. For example, using the cloud and hosted desktops you only need purchase thin client devices rather than PC’s. They are available at a lower Capex, use 60-80% less electricity to run than a standard desktop, and also produce less heat in the office that then needs cooling, which all drive down cost.
As ever, please feel free to call us for a friendly, no obligation discussion if you have queries on any of the above – 020 8099 1502.