— August 9, 2017
Simply put, there’s probably nothing as useless and wholly irritating as a computer or network system that doesn’t function reliably. When computers and networks go down, productivity suffers, customer satisfaction dips, overhead costs increase, and lost revenue is inevitable.
While establishing and running a business often involves many challenging budgetary decisions, one of the most critical allocations in a small business budget is computer support. Here’s why it matters.
Insufficient IT Solutions for Business
In an attempt to save money, many small businesses forego information technology support. Although two-thirds of small business owners report that it would be a major challenge to survive without wireless technology, for instance, a shockingly large number (27 percent) of small businesses have no IT support whatsoever. Instead, someone on the staff with a measure of familiarity with IT becomes the company’s ‘computer guru’ or someone’s friend who ‘really likes computers’ is summoned to provide advice and assistance when systems crash. Sadly, situations like these often lead to total loss of data, software reinstallation, long periods of downtime, frustration, and spiraling costs.
There’s no doubt that even small to mid-sized businesses need professional, knowledgeable technical support. They need information technology solutions that fulfill their industry’s requirements. Hiring an expert in the first place is likely to be far more cost-efficient and profitable in the long run. Limited budgets and inexperience often prevent small businesses from making the most beneficial IT decisions, so it’s easy to lose opportunities that companies with better support benefit from.
Technology allows small businesses to compete with large ones. It has lowered the cost of entry and improved profit margins. Still, it remains challenging to access these benefits without the appropriate IT support. Innovation—made possible through proper IT support—places companies on the offensive rather than the defensive. Any company that subscribes to a culture of innovation is on the path to growth; a company that doesn’t will end up obsolete.
Take a look at Proctor & Gamble, who has a reputation for innovation. Before the company’s focus on innovation, it maintained the industry standard of introducing new brands and products with a commercial success rate of 15 to 20 percent. By shifting its focus, however, it boasts a success rate of 50 to 60 percent; about half of all its new products succeed. Moreover, it has maintained a 6 percent organic sales growth, mostly propelled by innovation. In short, it’s getting more value for every dollar spent on innovation.
If You’re Not Ahead, You’re Behind
Today, technology permeates the work force. Corporate IT spending—a significant measure of the technology economy—is approximately $ 6 trillion per year, and includes hardware, software, networks, employees, data centers, and outsourced IT services. This amount reflects what it would entail to provide a $ 500 smartphone and $ 350 tablet to each of the approximate 7.1 billion people on Earth.
The aggregate of money that businesses spent on tech grew by a factor of nearly 20 from 1980 through 2015. By comparison, the global GDP barely tripled.
For the 27 percent of companies that don’t have sufficient tech support, being able to adopt and maintain such technology is a pipe dream. It means those companies are spinning their wheels while other corporations—specifically the ones that can keep up with technological trends—are careening ahead.
After all, business leaders are adopting technology at an astounding rate. Almost four billion people use the Internet daily, which accounts for half of the world’s population. In 2013, 66 percent of small business owners were using mobile technology or solutions as part of their daily functioning. That number continues to skyrocket every year.
So let’s be clear: not having the right tech and tech supports places a company far behind others. That isn’t the place business owners can afford to be.
IT Tech Support Adds Value
Many companies assign their tech department one responsibility: navigate problems when they arise. Technicians are reactive instead of proactive. With outsourced IT solutions, the tech department can shift its focus and start adding value to the company. Imagine if, for instance, the tech department had time to partner with the marketing department to craft a stellar app for smartphones or if the folks in tech could focus on building recruiting software, heighten the website visitor experience, or find ways to bill customers for a service thus far not addressed? By shifting the internal workforce to devising innovative solutions and employing an external workforce to handle everyday IT obstacles, a company suddenly becomes far more relevant. That is game-changing.
Scalability is critical for a company of any size. It refers to the ability of a system to grow to meet a company’s needs. Unless there is a repeatable process in place to transform innovation into financial performance, there is little economic sense in the idea. Leonardo da Vinci designed a flying machine; without the technology to support his creation, however, it fell flat—at least until technology caught up and someone else reaped the financial benefits.
Technology systems now streamline processes; artificial intelligence allows bots to answer customer inquiries, and machine operations can manage everything from negotiation to purchasing. President of State Street, Michael Rogers, predicted that by 2020, automation will have substituted one in five of the company’s employees. Similarly, Citigroup has estimated that in the next ten years, 1.8 million American and European employees could be out of a job.
True innovation is dependent on what’s available at the moment, not what may be available decades down the line. Thomas Edison described it succinctly when he said: “Anything that won’t sell, I don’t want to invent. Its sale is proof of utility, and utility is success. We can’t be like those German professors who spend their whole lives studying the fuzz on a bee.”
With the right information technology support services, corporations can actualize both the ideas and the means to implement them so that the ideas translate into money-making operations.
Can’t Afford Not To
Lest a business owner question whether the benefits of building a strong IT support system outweigh the costs, consider this: Companies that devote a great deal of money to implementing and maintaining technology have high gross margins.
According to a study by BCG Technology, the highest-performing companies in the insurance sector enjoy gross margins more than three times the margins of average performers. Technology intensities are more than 50 percent higher. In the banking and financial industries, top-performing companies spend roughly double what the average performers spend on technology implementation and support. This isn’t a coincidence.