6 Ways You Might Be Blowing Your IT Budget…and How to Get it Back on Track

There’s a difference between getting value and getting ripped off.  Do you know which one’s happening in your business? Many executives don’t.

We’ve worked with many small businesses, and have found the majority of them are overspending in at least one of these six areas. If you’re not sure you’re getting what you’re paying for, hopefully, our advice here will help you find out!

No one wants to pay for more IT than you need to, but unfortunately, costs have a way of creeping up if you’re not effectively managing all aspects of IT.

Here’s how it can happen.

Let’s say you need more server space. You buy a new server.

That one gets maxed out so you add more space.

Then it happens again.

Pretty soon, you’re trying to manage a crazy big network, and it’s so complicated and burdensome that it’s causing problems in all areas of your infrastructure.

Complexity is the result of this server space gone wild scenario, and so is added cost. Read on to learn about five ways that you could be overspending on IT and how to put a stop to these budget-busting habits:

Data Management and Storage

Whether you’re using cloud storage, onsite servers or both, data can multiply. Before you know it, you’ve got a bottomless pit of expense, as in our example above. Not only are there costs for the data storage itself, but it’s also time-consuming to manage data. Think of your phone, for example. When’s the last time that you deleted all of the duplicate photos? You probably haven’t because you don’t want to take the time. All of the data that you’re accumulating could also be increasing your costs for backup, as well.

Telephones

When was the last time you updated your company’s phones? Lots of businesses are turning to VoIP and other modern telephone services (Like Microsoft Teams) which is fantastic. But too many are still relying on the same hardware and service they bought years ago and paying far more than they should.

Prices and service levels in this area have changed drastically even in the last few years. Technology has given us plenty of high-quality, inexpensive options that offer helpful business features. Modern telephony services can allow you to forward calls from your business line to your cell phone for when you’re outside your office, set up advanced call routing and ring groups, receive voicemails in your inbox, use a virtual receptionist or auto-attendant, play hold music and informative messages, and much more that can be beneficial to your company. New features and technology are developed often, so be sure you’re talking to your provider regularly.

Internet Service

Internet service is another payment that often gets auto-renewed without review. It’s very possible that there’s another provider who could give you a better deal, or that you could renegotiate your plan with your current provider.

Costs creep up with your internet service when you get into a pattern of adding bandwidth whenever you think your connection is lagging. What might be happening is that bandwidth is getting used by everything from employee cell phones to connected equipment, and what you really need is a better way to manage your network and all of its connections.

If you do reach out to your provider and they aren’t willing to help you find areas in which you can save money or receive better service, it’s probably time to look at other vendors. If you have multiple options in your area, get offers from other companies and bring them to your current ISP. Sometimes they will match or beat them, but either way, you’ll be able to make a better decision on who to spend your money with.

Website and Search Engine Optimization Services

This is a tough category to determine whether or not you are overspending, and can be pretty variable depending on your goals and values. Some people might prioritize a cutting edge, modern website that makes their company look sophisticated over the number of leads they get from it. Whatever works for you and your business is fine. But you can still be taken advantage of by shady or ignorant providers regardless of your budget. The first step in figuring out what you should expect to pay in this area is laying out your preferences. After that, research average prices and packages.

 Software Licensing

Costs creep up with software licensing when no one is aware of automatic renewals, and there’s insufficient oversight on which users have which software. Another common situation is for companies to inadvertently pay for duplicate accounts, or buying licenses for users who are no longer with your company — which brings us to the next point…

User Management

If you’re not keeping track of who needs what software license, and adding and subtracting users as they come and go, you could be overspending. This goes for other assets that are assigned to your employees such as mobile devices, and email. It’s common practice for many companies to keep a mailbox open after an employee leaves to make sure that important communications aren’t missed. What often happens is that the email gets forgotten, and pretty soon, six months have gone by and you’re still paying $25 a month for the mailbox when you could have been using an alternative method that wouldn’t have extended your costs.

If your business runs on technology — and these days, it probably does — and technology is your biggest sore spot, then it’s easy for your focus to shift to getting your technology to work. When this happens, you could be experiencing untold opportunity costs because your competitiveness is compromised.

Ok, now that we’ve looked at the mistakes you might be making with your IT budget, isn’t it time to take a look at a few ways to make that budgeting process a success?

Unfortunately, putting together an IT budget that’s a recipe for success is much more difficult than it sounds. Every year you run the risk of encountering crippling technology issues if you don’t take the proper precautions. If your budget isn’t prepared for problems with your IT infrastructure, it could have disastrous results. Here are five ways you can avoid skipping a beat when planning for your business’s IT budget.

Consider Your Long-Term Goals
While it’s definitely important to consider the short-term goals of your IT budget, it would be foolish if you didn’t start planning for long-term investments. It’s no mistake that organizations are continuously turning to services like cloud computing and Software as a Service-type investments. Businesses are turning their standard capital expenses into operational expenses because it’s cheaper and easier to manage than the heavy investment of up-front costs. It’s easier to scale and change in the event that something doesn’t go according to plan further down the road.

Invest in Your Staff’s Training
It’s one thing to have the latest IT solutions ready to use for your business, but another entirely for your staff to understand how to use them. Some businesses don’t invest in the training of their employees longer than they have to, and this is proving to be a big concern. If employees don’t know how to use your technology solutions, they will waste time that could be better spent elsewhere; or worse, they could be making mistakes that you need to fix somewhere down the line.

Consider Your Storage Options
Again, it’s important to consider the long-term ramifications of your business’s data storage techniques. Is there one centralized location for all of your data? If so, what would happen if you were to lose access to it? How do your employees access this information? Do they need continuous access to your business’s data, or only in-house? These are the questions you want to answer. Having a fool-proof backup and disaster recovery solution can help protect your data from being lost due to a freak disaster or hardware failure while cloud storage increases your employees’ access to the data and allows them to work remotely from any approved device.

Always Anticipate Hardware/Software Upgrades
Hardware failure can completely derail your IT budget if you don’t plan to accommodate it. Hardware and software complications are difficult to deal with if you don’t explicitly plan to resolve them as quickly as possible. Your budget should always have assets allocated toward mitigating and replacing technology that’s critical to the success of your business. Otherwise, you could be dealing with huge expenses that will, without a doubt, break your budget, and force you to come up with funds from elsewhere.

Use Outsourcing and Consulting Services When Possible
Outsourcing certain responsibilities of your IT management (or even all of it) can have a positive effect on your budget, time that could be spent managing and maintaining your technology would instead be devoted to managing your business and ensuring its efficient operation. You can enjoy the benefits of being a business owner without worrying about constantly managing your technology.

For more ways to improve the functionality and return on investment of your business’s technology, give Net Activity a call at 216-503-5150.