The holiday season is here. Like many business owners, you may find yourself less concerned with presents and more focused on finishing up your 2018 IT budget planning. At this time every year, you reflect on what you accomplished (both good and bad) and start strategizing for the year ahead. Get control of your spending with this approach.
One area where I see a lot of under-planning is how companies budget for their IT systems. On-premise technology comprises a large percentage of a company’s overall spend—both in the short-term, and as a long-term, ongoing expense. When looking at your planning for 2018, here are some important questions to ask yourself:
- Where does your organization’s IT infrastructure currently stand?
- Are you doing all you can to meet evolving security and compliance requirements?
- Are you looking for ways to improve efficiencies across your entire organization?
- Or, will you continue to lag behind the competition by using the same systems, and getting the same results?
What does your IT budget plan include for 2018? Knowing where your business IT stands and where you want to go ver the next 12 to 24 months will help your strategic planning.
The IT Conversation is Shifting from On-Premise to the Cloud
Over the past few years, I have seen the IT conversation start to shift in planning sessions. As I speak with small business owners, understanding the value of the cloud has become a more frequent concern. But they’re also starting to talk about how they want more flexibility, are worried about losing data, and are tired of downtime and idle time impacting productivity.
Another question I hear often is, “Why should we move our business from on-premise to cloud computing?” Many have heard about how the cloud is redefining the way their peers are doing business and the many ways it helps small companies save costs, scale, and increase productivity. In Computerworld's Tech Forecast 2017 Survey of business leaders and IT managers, 79% said they have a cloud project planned or underway, and 58% of those using some type of cloud-based system graded their efforts an A or B in terms of delivering business value.
Nevertheless, many owners still resist migrating their systems from on-premise to the cloud, because they fear the risks associated with investing in new technology. In most cases, the difficulty lies in education. Understanding the financial costs can make the difference between businesses that succeed and those that fall behind.
Understanding the Financial Costs
The truth is, companies can take advantage of the scale of cloud IT service providers and leverage their expertise to accomplish things they wouldn't be able to do on their own. For start-ups and small to midsized businesses, the headaches and financial costs associated with buying, owning, maintaining, and securing an entire on-premise technology infrastructure and operations team can particularly daunting. Contrary to many business owners’ beliefs, the cloud can actually provide relief from these burdens.
The cloud is the cost-conscious business owner’s dream. It provides an opportunity to significantly reduce costs, increases companies’ agility and flexibility, empowers IT personnel and employees to do more, and provides a markedly better user experience.
Many business owners may not realize it, but your IT budget is as crucial to your growth in 2018 as your sales, marketing or new hires. The best place to start is with a cost-benefit analysis (if you haven’t already done so). First, evaluate the costs associated with planning, building and maintaining an on-premise system and infrastructure.
Here are some important things to consider when planning your technology budget:
- Evaluate your common IT expenses – operating systems, software, hardware, licenses
- Review your specific IT expenses – server replacement, workstation/laptop upgrades
- Evaluate your staffing expenses – IT personnel costs and internal resources to plan, build, operate, and manage all your IT needs PLUS the amount of time and money lost to connectivity issues, downtime, or poor support
- Use historical data to project future expenses
- Predict one-time expenditures
- Look for ways to make spending predictable – using cloud-managed services provides you with a fixed monthly expense, instead of an unpredictable fluctuation in costs
- Seek ways to push costs down – examine server capacity, data storage, and your backup, recovery, and phone systems
Next, consider how moving to a cloud-based system can offset these costs, while enhancing your customer service, increasing your employees’ productivity, and improving your bottom line.
Here are five financial drivers to consider when evaluating the cloud IT services model:
- No investment in large, upfront capital expenditures. Eliminate the need for in-house servers and reduce costs for physical storage, hardware, redundant data centers, disaster recovery systems, power, cooling, and backup systems, and electricity.
- Reduced software costs via upgrades included in monthly fees. Fewer expensive software upgrades results in considerable savings over time. A good cloud IT provider handles all upgrades, eliminating any concern about upgrading Windows Servers, SQL Servers, Middleware, SharePoint Servers, Citrix Servers, Application and Database Servers, or licenses, etc.
- Lower IT personnel and support overhead. Reduce overhead for IT personnel and support, while gaining 24x7x365 access to experienced technology and security experts that you may not be able to attract or afford in an in-house IT department.
- Cost savings gained through greater efficiency and higher productivity. Users can access the network from any device, anytime, and from anywhere with an Internet connection.
- Tax benefits. As operating expenses (OpEx) have distinct advantages over capital expenditures (CapEx), finance departments are trending toward this investment approach. By outsourcing your cloud IT services expenses, you can reduce net income, resulting in a lower tax bill each year.
After going through this exercise, we learned that cost savings, better security, and higher productivity are the primary reasons many businesses are starting to turn to cloud computing over traditional, on-premise IT systems.
Don’t Let 2018 be Another Year of Costly IT Surprises
These key benefits are critical to consider when thinking about switching your business from on-premise to cloud computing. Instead of waiting until there is a problem, a cloud IT services provider like IBIS Technologies can serve as your virtual technology advisor to do the planning with you. We will help you plan for your goals, review your progress, and identify and address areas where cloud technology can make your business even stronger.
Need Help Planning for 2018?
Are you ready to start exploring options for moving to the cloud? Or, maybe you’re in the middle of planning and could use some help moving it along. Either way, take a look at the cloud solutions we offer. We’re experts at planning, moving, and managing enterprise transformations from end to end. It’s what we do. We’ve helped many businesses like yours migrate to the cloud, and we look forward to working with you as well.
Contact us and let’s start planning for 2018, and beyond.