By Terry Doherty, CEO of IT service and support company Doherty Associates, the company he founded over twenty years ago. He has worked closely on the IT side with many SMEs. Here he shares some impassioned views gathered from conversations with customers, who despite the harsh economic backdrop are looking to refresh their IT systems.
As we emerge from recessionary times to face a flat economy, the chances are that many small businesses have shrunken IT budgets that just aren't robust enough to fund a much needed technology refresh. Often the companies we hear from have simply had to put off updating systems for some time and are surviving purely by breathing life into some pretty out-dated kit. These customers have found that the prospect of using banks to fund IT is far harder than it used to be. What once was a rubber stamp culture for securing funding is now far more challenging. Many prospective customers that I have talked to recently have been reluctant to go to the bank in case they get turned down. This they fear could be a black mark on their record and make things even more difficult in the future.
The chronic underinvestment that results from these challenges seriously damages the productivity of these companies. With both staff and management deprived of the right IT tools, it can impact significantly on a company's chances of competing against bigger and better equipped organisations. To redress the balance, small businesses urgently need to find a way of securing the right IT systems.
Cloud computing offers one possible solution here. For those who aren't that familiar with the term, Cloud technology delivers services over a network such as the Internet. In short, it allows users to utilise and manage their data on remote services accessed through their browser or via a mobile app. Fans of the Cloud claim that it allows organisations to get their applications up to speed faster, that the systems are easier to manage and require less maintenance. It is also more flexible, for example, if a company expands rapidly.
However, the biggest attraction of using the Cloud is that it allows users to avoid heavy up-front infrastructure costs. Thus, by looking towards the Cloud as a cash-flow friendly "pay as you go" model, companies can access all the best software without having any significant initial outlay. Most of the latest technology, which is also the same technology used by the biggest firms, is now available in the Cloud. This includes a full range of Microsoft systems such as Office, Word, Excel PowerPoint, Publisher and much more. So it is kind to finances and as a result allows limited IT budgets to fund a full refresh with the best software available.
In many cases there might be data that companies are reluctant to have in the Cloud, especially given a number of recent security breaches with both financial services and social media organisations. This might include accounting or employee records for example. In these cases, companies often want to keep the data "on premise" by retaining it on the main server in their offices. This is entirely understandable and yet having a server capable of exploiting the power of both the Cloud and internal systems is also important.
Where this is the case, I would recommend that small businesses consider sourcing combined server; Cloud software and service packages from their IT suppliers. The chances are that the whole package could be available on a monthly fee basis. Where this is possible, the costs would go through their books as an expense item and so the full tax benefit is realised year 1 as opposed to depreciating the hardware element over time, as would be the case through an outright purchase.
Once the right equipment becomes affordable, the small business can have all it needs to compete whilst their finances are still very much intact.