Running a business can often be about managing growth and the challenges it puts upon existing systems, processes and staff. With most modern SMEs today so totally reliant on IT it’s important to keep a handle on costs.
With so many software as a service (SaaS) applications hitting the market, it can also be hard to keep a handle on the different systems, let alone calculate their individual worth. In short, IT has the potential to generate a huge amount of unnecessary costs that can quickly stack up.
In this article I look at some of the ways SMEs can lower their IT costs and chief amongst these is through outsourcing.
Outsourcing your IT
There are many services and functions a small business can outsource but IT is perhaps one of the most fundamental day to day operations. Whilst most small businesses would love to pay the £30-£40k it costs to hire a full time IT manager, for many in the earlier stages of growth this just doesn’t make economic sense.
As well as the expense of employing them, there is always the danger an IT manager could leave and take all their expertise on your systems with them, leaving you with the burden of hiring another one and training them up.
Whilst the cost – benefit ratio in this scenario is acceptable for larger companies, for SMEs they can be very punitive.
Outsourcing your IT services to an outside provider can seem like giving up control but the financial and operational benefits for smaller businesses are numerous. They include:
Reduced staff costs
As well as the aforementioned savings in recruiting, training and paying a full time IT manager, it can often be the case that they spend a lot of their time working on quite minor jobs. By outsourcing your IT to an external provider there is an economy of scale that is translated into savings.
Reduced support and licence costs
IT service providers can also significantly reduce costs for SMEs in regard to support services which can be very expensive to run internally. They will also give access to a host of up to date applications without the expensive licence costs.
Free up resources
By having an external provider deal with day to day IT support, SMEs can provide their internal IT staff more time to focus on bigger infrastructure projects.
Access to expertise
Many smaller companies might lack the technical knowledge or foresight to properly manage their own IT infrastructure. Outsourcing essentially allows them to tap into a pool of expertise that is used to dealing with the IT challenges many businesses face.
IT infrastructure can become outdated very quickly and requires constant investment. By investing heavily in technology, IT service providers create an economy of scale that allows SMEs to essentially keep their IT infrastructure up to date, year on year, without the huge costs involved in doing this in-house.
Consolidate IT service providers
Recent research from Gartner has found that the average number of vendors SMEs were working with increased from 3.7 to 10 between 2005 and 2010. From e-mail, cyber security, and website hosting to accounting, payroll and e-commerce, the costs associated with juggling and managing various services and service providers can quickly stack up.
Many IT service providers are now branching out by offering a suite of services that extend well beyond help desk and support services. This can represent a significant cost saving.
Take advantage of cloud services
A simple way to save money when it comes to IT costs in an early stage business is to look to cloud services, which can effectively cut out the large upfront costs of IT solutions by allowing small businesses to remotely access powerful services hosted in the cloud.
The quality and security of these services is improving all the time and with the prevalence of broadband and fast mobile internet connections their use and effectiveness will only increase going forward.
There maybe some services that don’t scale well in the cloud or for security issues data must be held locally, but they are becoming rare exceptions.
Address infrastructure problems before they occur
As the IT infrastructure of a small company expands and develops along with the business problems, and issues will invariably arise.
Software and hardware issues can manifest themselves over time, but they can also happen very suddenly and the costs associated with dealing with critical issues can be very high, especially if you have to call on same day support services several times in a year. The costs to some businesses of systems falling over, even for a couple of hours, can be excessive.
Keeping IT infrastructure up to date is expensive but many external IT providers will offer remote monitoring that allow you to identify and deal with problems before they manifest themselves. Improvements in remote support tools also means many of these problems can now be fixed without the need for expensive call outs.
Keeping your IT infrastructure efficient, up to date and economically viable is one of the biggest challenges any SME will face as it develops. Outsourcing IT is in my opinion one of the most economical ways of ensuring a flexible and cost efficient IT infrastructure in the years to come, but as we’ve seen it is by no means the only way to save costs.
There are a host of other cost saving methods out there from taking advantage of open source software to automation, but I hope this article has covered some of the biggest issues facing small and medium sized businesses, as well as how to tackle them.
About the author
Dave Blackhurst is a Director at Evolvit a Bristol based IT support company helping some of the region's most well known businesses. Dave is passionate about IT and helping businesses reduce their spend whilst improving backup.