5 STEPS TO MANAGING IT COSTS

5 STEPS TO MANAGING IT COSTS

UNDERSTANDING an appropriate annual budget for technology is an ongoing challenge for many SMEs. Often there is no budget set, or the budget is based only on the previous year’s expenditure.

IT Leaders Group founder and general manager Scott Jones, says SMEs tend to over or under spend on technology, leading to profitability and productivity issues.

“Ultimately you want IT to be as predictable as possible for both outages and expenditure, yet also provide the maximum possible leverage of your staff time,” says the 2010 Gold Coast Young Entrepreneur of the Year finalist.

“When you under invest in technology and have the attitude of spending the bare minimum, then business risks increase and productivity decreases. Smarter corporate firms think hard about optimising their IT spend, and SMEs can learn several things from this approach.”

With clients ranging from small business owners right up to large corporations, Jones shares his insights into how SMEs can optimise their IT spend.

1. Don’t keep key pieces of equipment past the warranty expiry. Conducting repairs on equipment that is out of warranty makes spending unpredictable and it’s not unusual for a whole batch of equipment to fail at once. Replace equipment by its warranty expiry date or, if facing cost restraints, seek an extension on the warranty.

2. Spending on IT increases productivity. Old IT often means wasted productivity. Consider that spending $50,000 on PC upgrades that will last three years is only half the price of a single employee on minimum wage.

3. Decide and budget projects in advance. Projects like server replacement, network upgrades or bulk PC replacements are different to daily/weekly IT support and need to be planned and costed separately.

4. Moving to the cloud? Do your research. Cloud computing isn’t right for every business so do your research and don’t fall for a sales pitch. Watch out for bad cloud providers and review your options to minimise your cost and infrastructure burdens.

5. Understand the importance of IT support staff. Under-spending on IT labour increases security risks, disaster recovery risks and downtime incidents, while decreasing productivity and efficiency. Successful companies know IT labour is essential to support people and equipment.  Spending less does not indicate more efficient expenditure, so hire an internal network administrator and/or outsource IT help when necessary.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

REA Group buys full stake in end-to-end property sales interface Realtair

REA Group buys full stake in end-to-end property sales interface Realtair

Realestate.com.au operator REA Group (ASX: REA) has acquired the re...

HESTA to pump $250m into new global fund with Stafford Capital Partners

HESTA to pump $250m into new global fund with Stafford Capital Partners

Strong returns over the past three years from a $200 million global...

Pacific Smiles to extend nib dental offering to all centres

Pacific Smiles to extend nib dental offering to all centres

Takeover target Pacific Smiles (ASX: PSQ) may see its clinics filli...

The Chemist Warehouse deal is a sideshow: pharmacies are ripe for bigger disruption

The Chemist Warehouse deal is a sideshow: pharmacies are ripe for bigger disruption

There’s something curious about the proposed merger between C...