How do YOU value IT?

When it comes to IT expenditure, many small businesses and sole traders think of IT with a hint of resentment. It’s something they know they should do, but because many don’t understand IT, nor the potential benefits it can provide to their growing business, they’re reluctant to spend money and when they do, it’s usually not enough or on inappropriate technology or services. Sound familiar? In my experience, I’ve seen this all too often and it’s a trap that can end up costing a business a lot more than they realise.

In my experience, the businesses who have it right are the ones that consider IT and it’s place of importance within the business. What I mean by that is, consider all of the assets your business has (for this purpose, leased items or services should be included in the mix, even if they’re technically not assets) and prioritise these in order of importance (i.e. their criticality in regard to being able to operate your business). Let’s look at an example…

Business XYZ is automotive parts wholesaler. All of his stock is ordered online and he delivers items in the local area using his own vans. His customers place orders over the phone and via the internet. Payments are mostly by account but also via credit card.

The items most people would immediate assume this business needs to operate are:

  • Phone system
  • Internet connection
  • Inventory System
  • Online store
  • Online payments system
  • Delivery vans
  • Staff

What’s missing from this picture? Well, for a start, there’s no onsite IT infrastructure. At the very least, we need a router to connect to the internet, at least one (but usually two or more) desktop computers, perhaps a server (containing all the business documents, the accounting software), one or more printers, barcode scanners, a network switch and cabling…. The list goes on.

Now because Joe, (who owns XYZ business) doesn’t see the IT infrastructure nor it’s criticality to the running of his business, when it comes time to spend money on it, he immediately doesn’t see the value and looks for the cheapest option. Joe would happily pay a mechanic $150/hr to get his van back on the road (and wouldn’t think twice about it) but the suggestion that he spend the equivalent money maintaining his IT infrastructure (which is far more critical to his business) sends shivers down his spine.

What I have learned over the past few years of running my own consultancy is that there is actually a very good reason for Joe’s trepidation. When you take a car to a mechanic, there’s a reasonably good chance your car is going to be fixed when you pick it up. Not such a given in the IT industry. There are many IT consultants out there who are poorly trained, have limited experience and don’t earn a decent enough rate to do a proper and thorough job. This sometimes leaves business is worse situation that they were in prior to any failure. The IT industry also uses it’s “black magic” persona all to frequently to lure businesses into spending money on goods and services that they simply do not need. This leaves a bad taste in the mouths of business owners.

  • So where do you start? For the most part these simple tips will help:
  • Before purchasing any goods or services, have the seller explain to you exactly how this is going to benefit your business
  • When paying for support services, you get what you pay for. Pay peanuts, you get monkeys!
  • If you’re a small business, avoid big IT suppliers as they’re less likely to be really interested in your business due to volume and margins.
  • Make sure that any installation and ongoing fees are explained upfront before you purchase.
  • Ask for a 30 or 60 warranty period (where all servicing and bedding-in work is covered – this may cost you a little extra but it’s worth it)
  • Recognise the importance of your IT products and service and treat them just as you would any other business asset

That’s a pretty good start… check back here regularly for more tips and articles on IT for small businesses and sole traders.

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