Top 10 Mistakes companies make when investing in IT
Studies show that the average small to medium business (SMB) spends 6.9 percent of annual revenue on IT expenses. Whether it’s payment for cloud services, purchase/upgrade of network hardware/software, servers, or endpoints like PCs, notebooks and tablets, many organizations only factor in the upfront purchase cost rather than the total cost of ownership.
Limited expertise and tight budgets often prevent SMBs from making effective technology investment decisions. Organizations can reduce unnecessary expenditures and direct their spending on technology that fulfills core business objectives by understanding hidden technology costs and avoiding common mistakes. Before investing in new IT equipment, organizations should avoid making the following mistakes.
Routine maintenance
A Gartner research study estimates that the base price of IT equipment accounts for only 20 percent of its total cost of ownership (TCO). Aftermarket expenses like labor costs, ongoing maintenance, configuration, upgrades, patches, backups and technical support account for the other 80 percent. If these expenses are neglected, the lifespan of IT equipment becomes shorter.
Purchasing expensive IT equipment
Although organizations prefer going for the best IT equipment they can find, the “best” doesn’t automatically translate to the most expensive. Businesses should purchase IT equipment that meets their needs rather than going overboard to buy the newest and latest equipment on the block.
Using the wrong licensing model
Most organizations sign elaborate enterprise-level agreements with software providers to cover all solutions or products, though they may end up using only a few products from the entire suite. Businesses should always choose licensing agreements from which they can derive maximum benefit.
Taking short cuts on security
In today’s volatile cybersecurity landscape, securing endpoints, networks and overall IT infrastructure should be a top priority for businesses worldwide. Taking short cuts on security or using inadequate security products can spell disaster for business productivity and continuity.
Managing outdated equipment
Once IT equipment reaches its lifecycle, it’s best to upgrade immediately. To save costs, some businesses try to manage outdated hardware, servers and legacy solutions as is. However, this will end up costing more in the long run since the IT environment will become increasingly susceptible to issues and downtime.
Trying to do everything in-house
Some organizations believe that doing everything in-house (implementation, deployment, configuration, maintenance, repairs, technical support and more) is cheaper in the long run. However, they fail to factor in the hiring/onboarding costs, salary, benefits, overtime, health insurance and other costs associated with hiring full-time employees. In most cases, outsourcing such functions is the best play.
Some of the other mistakes companies make when investing in IT include:
- Failing to include a budget allocation for IT needs.
Many businesses don’t plan proactively for their IT needs after initial purchases of equipment. Each year every business spends money on their information technology and having a budget to support said costs will support your yearly budget and business operations. Whether it’s a break-fix, an upgrade, or ongoing support issue, keeping your operations on point involves a financial commitment (whether you realize it or not).
- Buying a retail PC / retail equipment for your business
The equipment available for purchase at your local retailers intended for residential use simply doesn’t have the power or capabilities necessary to keep your business reliably connected and secure. Business tier products are engineered to keep your systems up and running- if you skimp on your equipment, your user experience and operational ability will suffer.
- Neglecting systems compatibility
A variety of hardware and software are utilized by SMBs and enterprises today, ensuring systems compatibility is a critical step to consider in your IT infrastructure. If your internal systems are not capable or configured to work together, your business will face ongoing and persistent technology issues- be diligent to prevent this from happening to you.
- Not fully researching your IT support
Whether your business employs an IT specialist in house or outsources this effort, your business needs to know this resource has both the compatibility and expertise needed to keep your environment running and support your future growth. There are many employable technicians lacking applied knowledge, interpersonal skills, and understanding of business-critical operations that could unknowingly harm your operations. Your business also needs to be mindful when looking for an outside IT company: how do they communicate, the conduct of technicians in the field (at your business location), how does your business ask for support.
Our Recommendation
Creating a tech roadmap and IT budgets can help prevent businesses from making unplanned or unnecessary IT purchases. SMBs should also reduce the complexity of their IT infrastructure by standardizing software platforms and equipment. This will help regulate current spending and effectively control and manage future IT expenditure.
Think Tech Advisors assists companies in creating effective, efficient IT solutions tailored to their business strategies and goals.
