5 STEPS TO MANAGING IT COSTS
Written on the 11 April 2011
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.
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.
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.