In a recession, sometimes spending a bit on technology can actually end up saving your business money over the long term. Investments in virtualization, thin clients, Web conferencing, and other technologies can pay off.
“Strap in, it’s going to be a bumpy night,” to quote the immortal actress Bette Davis. More than a famous movie line, it could also be used as a metaphor expressing the rising anxiety among business owners as the economy seems to sink a little further into recession each day.
For most organizations, IT is major piece of the pie when financial managers look at their operating costs. When it comes time to make cuts, it may seem like the low-hanging fruit because it’s such a big target, but think again. Chances are the IT budget doesn’t need to be cut.
“IT budgets for small to mid-sized businesses are always tight, even when the economy is good. So in lean times, it’s less likely there are that many opportunities to trim back costs,” says Jim Browning, a senior research analyst from Gartner, of Stamford, Conn.
That being said, it may be time to re-evaluate how that money is being spent and reshuffle priorities according to which technologies will actually pay for themselves and help the bottom line.
Technology choices can save $$$
There are countless ways technology can save organizations money. After all, technology is meant to be a tool and by definition is supposed to increase efficiency which always translates to saving money.
However, there are a number of areas where the IT department can be especially helpful in giving the budget an assist in this economy. As small to mid-sized businesses take inventory of their technology choices, here are some technologies that can translate to big buck savings.
- Counter rising costs due to fuel prices. With oil hovering at $100 a barrel, it’s a good time to get the company’s road warriors off the road as much as possible. Look at ways to meet and collaborate online as an alternative to face-to-face time.
- Increase productivity. Which technologies are allowing employees to get their work done faster or be outsourced altogether? IT managers have become very good at pinpointing those opportunities, to be sure. An area more likely to be untapped for improvement, however, might be in taking a look at which technology choices and strategies can be fine-tuned to run faster, involve fewer steps and give more ease of use to employees.
- Decrease maintenance time on the network. “Years ago, it used to be if the network was down it didn’t really interrupt getting business done. Nowadays if the network is down, your business is down,” says David Robertson, president of Covenant Technology Services, an IT consulting firm based in Houston, Texas. In addition to keeping downtime to a minimum, businesses need to seek out more automated or turnkey solutions that require much less human involvement. The best way to do that is too offload as much of the infrastructure, as possible. Fewer boxes on the network translate to less time taking care of it.
- Lower utility bills and other operating costs.Servers, PCs, printers, and hardware appliances of all varieties have one thing in common: they all run on electricity. Even with that little energy star logo, a lot of gear can run up massive utility bills, especially when you factor in the extra air conditioning needed to keep all those appliances from overheating and breaking down. Again, downsize the number of appliances and the accounting department will see big dividends.
10 technologies that can save money
The mandate to save money may be clear, but which technologies actually pay for themselves is a tougher call to make for many businesses. Here are ten options that many small to midsize businesses are trending towards and reaping significant financial rewards.
- Dumb terminals or thin clients. It’s not the right solution for every user in the company. But for the average staffer who just needs Internet access, e-mail, and access to key applications and databases to do their job, a cheap alternative to the desktop is a dumb terminal. Store all the computing power on the server where it is consolidated in one place for easy control, stricter security and less maintenance. “I’m surprised more companies aren’t doing this. I’ve seen midsize companies save as much as $15, 000,” says Browning.
- Virtual Private Networks (VPN). “If you have multiple offices and haven’t switched from using WAN to using a site-to-site VPN, then you either have extreme security needs or you’re wasting a ton of money,” says Robertson.
- Virtualization Software. Virtualization separates the server from the operating system. Translated, that means servers can be used more efficiently hosting and replicating multiple applications. Such optimization means a business can do more with fewer servers. Companies can save tens of thousands of dollars buying fewer servers, requiring less power and fewer pairs of hands to manage it.
- Scanners. This tip comes from Chad Washburn, responsible for onsite IT at the Naples Botanical Garden in Florida. “It’s taking awhile for the staff to get used to the idea. But we’re using our scanners to cut down the costs of mail outs. It’s much cheaper to scan something in, convert it to a PDF file and e-mail it out than pay for all that paper and postage,” says Washburn.
- Web conferencing. Thanks to voice over Internet protocol (VoIP), meeting face to face via Web camera and even collaborating and manipulating presentations in real-time has become a much more mature technology in recent years. It’s cheap, easy to use, and beats a three hour lay over in Atlanta anytime.
- Software as a service (SaaS). “SaaS is just beginning to have an impact, but it’s likely to have a huge impact on small to mid-sized businesses in the future,” says Robertson. He adds that subscription-based software typically has the added advantage of allowing businesses to scale up or down as needed, a flexibility that will help smaller companies especially during a recession.
- Archive servers. For files that rarely need to be accessed, it’s a huge waste of energy to run those storage servers 24 hours a day. Archive servers are designed to spare the utility bills and hibernate until someone actually calls up a file.
- Switch to Macs. “If all the computers in my office blew up today, I’d replace them with Macs,” says Reuben Swartz, president of Mimiran, a pricing software company based in Austin, Texas. Swartz points out that Macs crash less and therefore disrupt productivity less. Additionally, he believes although Windows-based PCs start at far cheaper prices, by the time you add on all the extras needed for a business-hearty machine, Macs are actually quite competitive in price now.
- Stick with Windows. Desktop PCs are cheap -- $500 will buy the average worker enough horse power on their hard drive to do whatever they need. Despite inroads made by Apple and Linux, Microsoft is still the major player in the business world and IT managers have to consider what will integrate best with the rest of the network infrastructure and create fewer labor intensive maintenance headaches on the backend.
- Choose neither. Linux-based operating systems and other open source applications are increasing in popularity. Cost is the big reason why. Open source means no heavy licensing fees to pay and since every developer in the world has access to the code, there are many IT contractors that can service it. It’s much cheaper to get a service contract for open source solutions than either Windows or Macs.