5 STEPS TO MANAGING IT COSTS

Written on the 11 April 2011

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.


Latest News

THE STAR'S STUNNING ANSWER TO CROWN'S BARANGAROO

THE Star Entertainment Group (ASX:SGR), not to be outdone by James Packer's Barangaroo development across the ...

BRISBANE COAL TERMINAL REOPENS AFTER SHIPLOADER REPAIR

COAL loading has recommenced at New Hope's (ASX: NHC) Brisbane terminal today after repairs to its ship loader, w...

SUPERYACHTS OFFER UNTAPPED POTENTIAL AT COMMONWEALTH GAMES

SUPERYACHT Australia has devised a strategy to attract more superyachts to Queensland and capitalise on revenue op...

GDP FIGURES A 'WAKEUP CALL' FOR PARLIAMENT

THE GDP figures are an end-of-year wakeup call for Parliament about what lies ahead for the country, according to ...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter