Rethink Your IT Budget and Strategy
Do the costs of maintaining a solid IT infrastructure need to soar as your business expands and grows? The answer is simple: No. However, owners of small to medium-size businesses (SMBs) do need a comprehensive awareness of their technology expenses. As with any investment, you need to know how it is being used and what you are receiving in return.
Today, businesses are almost singularly reliant on technology to function effectively. CEOs and top management of SMBs fully appreciate that downtime from a system or network means lost productivity and revenue. Added to this is the negative reputation that a company will acquire.
By the same token, employing IT support engineers can be expensive. Many SMBs, struggling to remain competitive in the current economy, opt to pay for on-site support when needed. Not having an in-house IT team has its pros when it comes to minimising the payroll.
As the benefits and cost-saving factors associated with virtualisation and cloud computing become increasingly more apparent, SMB executives are rethinking their strategy when allocating budgets for IT support and infrastructure. To this end, they are focusing on a greater return on investment (ROI) and a reduced total cost of ownership (TCO).
Executive Perspective: ROI and TCO
For business technology and IT support, ROI is determined by the ratio of cost of reduction and avoidance to the total investment for any specified time frame.
In the business and tech world, TCO is typically associated with these categories:
Downtime – When considering TCO, any smart business executive will ask, and hopefully be able to answer, the question: ‘What is the real cost of network and server downtime?’ and ‘What are the financial and business implications for my staff and customers being unable to access the data they need?’ Unfortunately, downtime encompasses all costs linked to network and server outage, whether the events are planned or not. Besides the quantifiable losses such as employee productivity and revenue, downtime also produces many hidden costs that are long-term and difficult to gauge. One such cost is your precious business reputation.
IT Operations – TCO includes your network and storage infrastructure, how servers are configured and deployed, your data centre power and any cooling facilities you have installed.
Hardware and Software – A major contributor to TCO is the hardware and software vital for business operation. Added to this are the costs of contracted or outsourced IT support, upgrades, backup, virtualisation, disaster recovery and virus/malware protection.
Administrative Costs – Running a business doesn’t come cheap. TCO also umbrellas costs such as staffing and labour, quotation costs, vendor contract negotiation, procurement process monitoring and purchase approvals.
Re-evaluate Your Static IT Strategy
Whatever the reason, many SMBs are inadequately staffed in terms of IT maintenance and support. With technology moving rapidly forward and new trends emerging every day, your IT infrastructure needs to be thoroughly prepared for the increased risk of network failure, server downtime, potential data loss and malicious security threats. The past speaks for itself; many of those who were ill-prepared faced business closure. Don’t let history repeat itself.
How do you address new and evolving technology challenges? CEOs and top management executives of SMBs instinctively hire more in-house IT staff. At first, this may seem the logical move to make. However, you need to consider a few issues coupled that are with this decision. Firstly, many SMBs find the task of managing their internal IT team challenging. Staff turnover is high since qualified IT employees consider SMBs as a rung on the corporate ladder; talented individuals quickly move on to large corporations which offer better job security and improved prospects for professional growth. So SMBs are often faced with a repetitive cycle of recruit, train, replace when it comes to their IT staff compliment. Not only is the cycle economically unsound and unproductive, it is frustrating, to say the least.
Also, a company with inadequate IT resources often becomes a victim of downtime and system failure incurred due to human error. In a nutshell, when too many responsibilities are handled by too few engineers, expensive mistakes can be made. Recent research reveals that human error by the in-house IT team accounts for approximately 40% of downtime and outage events. Yet another thorn in your side is that your staff spend up to 50% of their time fixing these issues. Not exactly the reason why you employed them in the first place.
SMBs need to move away from a break/fix mentality. Companies tend to have a reactive approach to IT support, relying on on-call engineers to provide a quick fix to restore a server, system or network. Not only is this an old-school M.O. but also a costly strategy. SMBs using break/fix pay a high price in exorbitant hourly rates, surcharges, and hardware/software servicing and replacement fees. Moreover, revenue loss from downtime is substantial since it can take up to 48 hours for an IT engineer to arrive on site and investigate an issue. And then there is the time that it takes to get everything up and running again.
Are employing countless in-house IT specialists or using a break/fix route valid tactics for increasing your ROI and decreasing TCO?
Virtualisation and Managed Services
Some SMBs have undergone a changeover with respect to their IT support and maintenance. Increasingly more popular are the use of the relatively modern technologies virtualisation and cloud computing. Not only are they cost-effective but also mean that you can relocate an entire server offsite to a virtual server or software bundle. The bundle is all-inclusive – your applications, data, patches and operating system all in one place. You’ll also save on hardware and energy costs since fewer physical servers are needed in your IT infrastructure. Fewer servers also simplifies IT management and any backup or recovery that may be needed.
VMWare, a United States based cloud and virtualisation software and services company, recently stated that SMBs that have taken on board virtualisation show a reduction in TCO in the vicinity of 67%. That’s a significant saving, if not more.
Virtualisation and cloud computing, although time and money saving, have the potential to be disruptive to an IT infrastructure. Ever on the increase are security breaches involving the cloud. Furthermore, for individuals who are inexperienced with these technologies and the commensurate software, will be placed on a steeper than usual learning curve. The system administrator’s role also takes on a new dimension. Their responsibilities become more complex and multi-faceted, having to cope with clients and employees who are online 24/7, plus dealing with the challenge of immediate data backup and recovery should an unplanned outage occur.
The complications that accompany a new technology such as virtualisation may take months or years after implementation to manifest. Consequently, SMB management needs clarity with respect to any possible risks posed to the company IT infrastructure. On top of this, alternative solutions and methodologies should be at hand to optimise IT performance, minimise downtime and enhance productivity.
A popular trend in IT and network support is for an SMB to form a partnership with a managed service provider (MSP). The MSP acts as the SMB’s IT support mainframe, using remote monitoring and management (RMM) tools to determine the status and health of your IT infrastructure. MSPs offer a 24/7 Network Operations Centre designed to monitor your specific IT services. Another bonus is that MSPs provide an end-user Help Desk that is accessible to staff and customers around the clock.
MSPs provide a gateway to technologies that automate most of your routine in-house processes. Your IT team can then focus on projects that are more meaningful to company strategy and profitability. Labour is no doubt an expensive component needed to ensure that your IT infrastructure is safe and secure. By drawing on the services of an MSP, not only will you save money on labour, but see tangible increases in productivity. The risk of data loss from human error and network downtime will also be diminished.
With a trustworthy MSP by your side, you and your team can work to fulfil your customer’s needs, knowing that your outsourced partner will offer these services and more:
- Monitoring Network and Operating Systems
- Enforcing your Network Security Protocol
- Applying Backup and Disaster Recovery to Systems and Data
- Managing and Monitoring of Mobile Data
- Updating Antivirus Software and Detecting Malware/Spyware
- Managing Critical Patches and Software Updates
- Auditing the Performance of Network/Computers/Software
- Remote Desktop Monitoring and Maintenance
- Proactively Monitoring Alerts
Wipro Limited and MSPs
Wipro Limited is an India-based IT consultancy firm. Here are three examples of savings made by the company since deploying MSPs.
Alert Monitoring – By using MSPs, Wipro has seen an 80% decrease in the need for in-house monitoring. Risks that were previously unidentifiable are now clearly evident.
Help Desk Requests and Ticketing – Using MSPs to automate these processes, Wipro has been able to decrease in-house time spend on the same tasks by 30%, thereby increasing productivity.
Reporting – At Wipro, reporting and business communications are automated using service-level management tools and dynamic dashboards. Using MSPs in this way means that client and employee trust of the network as significantly improved. Furthermore, there is decidedly less fear of unexpected risks.
You shouldn’t think of an MSP as a cheap alternative to in-house IT support. By outsourcing to an MSP, you are essentially accessing current processes, methodologies and streamlined technology partnerships; these would prove challenging for your IT team to handle. The MSP provides sound preventative services that proactively identifies and eliminates threats before they expand and undermine your business.
You can decide how much IT accountability the MSP has. They can be solely responsible for your IT infrastructure, or they can take on a lesser role by working alongside your IT team. Whichever option is best for your company, you know that the MSP brings with them a wealth of expertise and experience. This is what sets them apart from the likes of providers who only fix it when it breaks.
An SMB that enlists a reliable MSP is making a sound, long-term technology investment in proactive network and risk management. For a single engineer to match this would be quite an accomplishment.
MSPs don’t deliver a generic service. Through consultation, they develop a comprehensive understanding of an SMB’s unique operations. The MSP will then deliver a tailor-made and structured set of services, aimed aligning technology with the SMBs strategies, objectives and vision. With this in mind, the MSP becomes more than another service you enlist, they are your partner.
A cliché: business is becoming increasingly competitive. Another cliché: technology is expanding at an alarming rate. Cliché’s or not, the statements hold water. An SMB needs to take full advantage of the innovation and prowess of the MSP. In this way, clients and employees are satisfied. To meet client needs, promote staff productivity and sustain business continuity, SMBs must have in place a reliable IT infrastructure.
Final Insight
By using a professional MSP with know-how, you will keep your team and customers happy. ROI will increase and TCO will decrease by rationalizing costs and making productive use of human resources. You will benefit knowing the fixed monthly rate tended by the MSP, and avoid expensive on-site IT consultant fees. Having gained more insight into the perks of using MSPs, when will you make one your partner?
