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Part One: It’s Time to Start Viewing IT as an Investment, NOT an Expense

So many business owners view IT as some kind of necessary evil akin to tax that must be tolerated, rather than embracing IT as an investment.

IT as an alternative

Our recent post The Cloud: Five Misconceptions About Office 365 Holding Your Business Back touched on the idea that IT should be viewed as a legitimate investment rather than just another expense.

So why are so many businesses still refusing to accept IT for what it really is, Investment Technology?

The Pitfalls of Maintaining a Small Business Mindset

For this post I decided to borrow from someone far more experienced than myself.

Sales Manager at Select Technology, Guy Webb, has spent over a decade in the world of technology.

Guy has developed his technical prowess while always maintaining a keen emphasis on the people who ultimately rely on said technology.

Mark: To kick things off, what would you say is the biggest obstacle faced by small business owners today?

Guy: Rapid change presents a huge challenge for small businesses, especially when we look at how quickly technology is changing.

The real challenge is overcoming resistance towards making small incremental changes. But this needs to be done if a business is to keep up with the pace as technology develops.

Mark: And would you say there is a fear of obsolescence?

Guy: Obso-what now? Haha!

IT as an investment

Of course. A lot of businesses think it’s pointless to invest in a technology they think will be obsolete six months down the line, understandably.

This line of thinking means that IT falls down to the bottom of their list of priorities.

The small business mindset stems from viewing things like IT as an expense rather than something that can be invested in to help the business perform more efficiently.

Mark: Do you see this mindset permeating into other areas of a business?

Guy: Absolutely.

I was just going to say that Marketing is another area that usually ends up as a low priority, when really it should be a top priority for most businesses.

If you’re not marketing your product, sales will suffer.

So I suppose the small business mindset leads to paying the bare minimum just to cover basic requirements. Or rather, what the holder of the purse strings thinks are basic requirements.

Price Shopping for a Rolls Royce

Mark: So without naming names, can you think of any of your own clients who may fall prey to small business mindset?

Guy: Well I can think of a great example of two clients who are roughly the same size and operate in similar industries, yet who are polar opposites in their attitude towards technology.

The first pays around £X per year for us to support XY employees; the other pays £3X for more or less the same number of users.

It’s no secret that we sometimes struggle to service the first client because their ‘bare essentials’ mentality doesn’t always account for the curve balls we’re thrown from day to day.

Mark: The second client pays almost three times as much for the same staff numbers – does the service really scale like that?

Guy: Well look, the £3X client understands and moves with the advancements that technology brings.

They’re not afraid to make that investment-

Mark: And I guess even if they are afraid, they’ll do it anyway if they can see the value.

Guy: Exactly, and the £X client will probably end up spending any “savings” on some form of upgrade down the line anyway.

Look at it like this…

<Guy proceeds to scribble frantically on his notepad>

IT as an investment

Maybe we should invest more in our graphics…

On the left is a business who moves with the times and keeps their IT infrastructure up to date.

That big green area is the increased efficiency the business enjoys as a result of a consistent investment level [labelled IL] over time.

On the right is a business who puts off IT investments until they become a necessity for one reason or another.

Notice how much smaller the green area is for the guys who view IT as just another expense?

Mark: What’s the grey area on the right?

Guy: That’s the efficiency and potential growth they’ve missed out on by not stepping out of their comfort zone. It’s a cliché but you get what you pay for!

If you go shopping for a Rolls Royce, you’re not going to be concerned with cost because Rollers aren’t a commodity. You’re shopping for the best quality, not the lowest price.

The same is true with IT; it’s not a commodity.

No two IT helpdesks are the same.

Skillsets, team structures, escalation procedures; even company culture. These things can all vary massively from one provider to the next so to compare them like for like is missing the point.

Price shopping can cripple the competitiveness of a business because it keeps you in a mindset of scarcity; worrying about the pennies instead of proactively searching for opportunities to bring in more pounds.

Click Here for Part Two