Despite all of the mind-blowing advances with technology over the past few decades, the unfortunate reality is that devices like computers and servers still have life cycles: they are built, they age, and they die. For small businesses, this means that you simply have no way around IT upgrade projects (sorry).
In many cases, we’ve seen IT upgrade decisions come down to one main factor: cost. This is why our IT consultants head into annual budget review meetings with our clients prepared to explore different upgrade options and the associated investments.
When you’re talking about saving on your IT upgrades, there are two very distinct areas you need to consider: short-term expenditures, and long-term costs. Unfortunately, there is often a give-and-take—cutting immediate out-of-pocket costs too drastically often results in costly losses of productivity down the line, and saving in the long run often demands higher up-front investments.
Let’s explore a few hypothetical scenarios to demonstrate how different decisions can end up affecting your small business:
Scenario 1: Hardware Upgrade
An advertising agency needs to buy 21 new laptops. The IT budget is tight this year, so they decide to purchase lower-level machines that should still have the basic capabilities needed.
- Short-Term: The agency saves around $8,000 on hardware and software and remains well within their annual budget.
- Long-Term: 12 months down the road, machine performance slows to the point where it affects the user’s ability to work. Half of the agents using these laptops lose 30 minutes a day (5 total billable hours each day, 25 hours each week, 100 hours each month) due to the trouble they experience.
Scenario 2: Backup and Disaster Recovery Upgrade
A consulting company knows they need to back up their critical client data. They feel that they can only afford the low-level option that costs $0.50/GB of data, rather than the more comprehensive disaster recovery solution at $2/GB.
- Short-Term: The company enjoys a low monthly invoice, and doesn’t experience any trouble recovering lost files.
- Long-Term: The server that hosts their primary database crashes. Since their solution is the low-level backup option, the company needs to order a new server, have it shipped, and then upload their data from a hard drive that is shipped separately from their provider’s datacenter. The process—even expedited—takes 3 days, during which the company was effectively unable to function.
Scenario 3: Server Upgrade
A 30-person construction company is due for a large-scale server upgrade. As an alternative, they chose to move their entire network to a cloud environment.
- Short-Term: The business has a one-time $10,000 data migration project to pay for, and invests around $6,000 each month in cloud desktops—more than they were paying previously for managed services.
- Long-Term: Rather than investing $40,000 of capital every 4 years in a server upgrade project, the company has no servers to maintain, has significantly extended the life of their workstations, and simply pays their predictable ongoing monthly fees.
As you can see, choosing the right IT upgrade is a fairly complex and strategic undertaking; rather than simply cutting your up-front investment, you must take into account how IT affects your overall business operations. The main questions to ask yourself is this:
How critical are your IT systems to your productivity and business goals?
If the two are intimately entwined, you should focus your efforts on getting a good return on your investments (which, put bluntly, probably won’t be cheap). If the two are barely related at all, then you’ll do just fine by putting the absolute minimum amount of money into your upgrades, from the devices you buy to the support packages you subscribe to.
All in all, make sure you take the time to explore all of the benefits and risks before you make any big decision regarding your technology; like it or not, most of us can’t afford not to.