As we start to see the weather change and the holiday decorations being displayed (way too early in my opinion), we are reminded of the impending end of our current year and the need to start planning for the next year. Financial forecasts report a modest 2% growth in our economy and business spending increases to continue as signs of our economic recovery, slow as it is. (source: http://www.kiplinger.com/businessresource/economic_outlook/)
A good expense control plan that helps to keep your employees productive will be a key component of everyone’s budgeting process for 2012. Budgeting for IT expenses can be challenge since we typically look at IT spending as just a “reactive” expense, however I would challenge us to consider this expense more of an IT investment in productivity. When we start to revere IT expenses as supporting our employees’ productivity, the budgeting process can take on a whole new perspective.
My recommendation would be to start with asking several questions to start the internal dialog:
What has changed within my business since implementing our current infrastructure? Has your business grown this year or do you plan on growing in 2012? How is your current infrastructure supporting your growth? Adding additional people, changes in workflow processes, changes in software and/or regulation can take their toll on performance and productivity. Also, software licensing may need to be upgraded to support your growth.
What parts of my infrastructure are aging, starting to have issues, or just need performance upgrade? Typically, servers have a planned useful life of about 5-6 years, desktop computers will provide good service 3-4 years and laptops should be expected no more than 2-3 years. While computer hardware relatively has come down in price per performance rating, software that does more and our reliance on them has increased at an even faster pace. Scheduling them for replacement or upgrade now can avoid the much higher cost of having to react to a catastrophic failure, especially when you consider the costs of overtime, lead times for hardware, and the impacts on your employees and customers.
What's new in products and services that could enhance or replace parts of my infrastructure? With the introduction of cloud-based services and new remote accessibility products, we have to consider if these options make sense for business. And the attraction of converting the large capital expenditure to a manageable monthly expense to get the “new stuff” can make a lot of sense for the small business owner. For example, migrating from an aged in-house Email server to Microsoft Office 365 just might offer more features and abilities to enable a more productive workforce.
How do I get the most out of what we have now? Discuss the condition of your current network infrastructure, servers and workstations, software and IT–related services. Also, discuss creative ways to get the most from the dollar already spent. Many times, there are “unlocked” secrets of functionality we may already have, but are not using to their potential to increase productivity. For example, using Exchange and Outlook’s calendaring and tasks collaboratively can decrease the needed communication, reduce re-work or duplicate efforts and increase productivity with the ability to delegate and follow-up in moments versus hours. Also, do your people have a resource when they have trouble or just a question about their systems? Help Desk services might be good way of increasing productivity as well.
What are we doing to be proactive and prevent catastrophic failure? Discuss your current infrastructure with your IT provider and identify potential points of failure and review ways to postpone or prevent the inevitable - as every piece of machinery will fail at some point. Some of the options would be managed support services to ensure all security updates are applied, review event logs and performance markers often. Ensure you have a certain amount of redundancy so if one part fails, you have an automatic plan “B” in place. Some examples would include fixed rate managed support service, off-site backup services, a good backup solution or even a good business continuity solution.
What is my plan if we do have a catastrophic failure? Ask yourself “What would happen if I just shut off my servers?” Brings chills down a business owner’s spine, doesn’t it? When was the last time you verified your backups are really able to be restored? How will your people work during a catastrophic failure. More important, how will your customers be served and revenue maintained during a catastrophic failure of your core systems. Now would be a time to have a frank discussion and planning for business continuity with your IT provider with recommendations for the next year to be as prepared and economical as possible.
When would be a good time to implement change? I know the initial response is “Never!”, but what I’m referring to is the business high and low cycles. The best time to upgrade or implement change is during a non-peak period specific to your industry instead of crisis during your peak period. Sometimes, training and adjustment time needs to be considered as well. Only you know when it’s a good time to introduce change. And finally, reactive-based change (like a catastrophic failure) is never good timing.
After you have done the soul searching that these questions may have introduced, build a plan of spending recommendations and timing for the next year. You are ready to apply dollar amounts for your budget! While the best source of pricing estimates will be your IT service provider, here are a few examples of pricing for various common budget items.
• Server Replacement: $3,000 – $25,000+ depending on size, usage, software licensing and migration
• Workstation Replacement: $1,000 - $2,000+ depending on usage, size, business version of Windows and Microsoft Office and other software licensing
• Off-Site Backups: as little as $10 per workstation or $75 per server per month
• Fixed Price Support and Proactive Managed services: as little as $40 per user/workstation and $170 per server per month
• Software upgrade: cost of licensing plus 1-3 hours per machine for installation and migration
Also, don’t forget the cost of security products, anti-virus/anti-spam software and server warranty renewals.
And finally the cost to discuss these questions and options above with your IT service provider: typically FREE – yes, that right… Most IT providers will want to partner with your small business for FREE to discuss your needs and help plan a graceful, least-impactful upgrade of your infrastructure.
And a little shameless plug… Schedule your IT Planning and Budgeting Review TODAY with CAP5, your trusted partner. Just call us at 713-979-5280 (option 1: sales) or send us an email to sales@capfive.com, or visit us on the web at www.capfive.com
As always, your comments regarding this article and suggestions for future articles are desired and appreciated.
Until next post…
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