Is technology taking over the world? Not quite. But for a profitable and effective business, technology is an integral factor —and something you should carefully consider in your next budgeting sessions.
Are you looking for a way to stay competitive and profitable? Are your employees feeling the strain of technology-induced stress? Is there an increasing sense that no matter what you do, your businesses cannot keep up without incorporating new technologies into every aspect, from planning meetings to making hiring decisions faster than competitors to increasing operational output? You need an investment in IT.
There are many benefits to seeing IT as an investment, like happier, more productive employees; better operational efficiency; and reduced costs. We’re here to help you and other C-level executives understand the differences between IT as a cost and IT as an investment.
Let’s begin with the first question…
1. How do you view your technology?
Technology has changed the game for business owners. The old days of growing a company were when scaling meant hiring more staff, but with technology’s help, you can improve efficiency and get things done in less time, without needlessly increasing your workload.
The most important question to ask yourself when considering technology is whether it’s an investment or cost. One way of viewing this would be to compare to electricity, which is necessary, but not something you’d want as your company’s growth factor; it’s simply a cost of being open.
On the other hand, technology advancements have provided us endless opportunities to increase efficiencies across the board. At this point, technology has become an investment and not just a cost center. You know that your strategic IT decisions will pay out dividends in all areas of operations and budgeting.
2. Do you know what % of revenue is budgeted for your IT?
A sure sign that IT is considered a cost for a company is when they don’t know the percentage of revenue budgeted for IT. In contrast, investments are accurate, thought-out, and thorough.
Companies that see their IT as an investment, know their exact IT budget and why they have allocated that percentage of company revenue. They also know what impact a smaller or higher percentage will have.
3. In which ways does technology contribute to achieving the company goals?
Knowing how your technology contributes to achieving company goals, means you have an IT strategy in place. It means you invest in technology to make that strategy a success.
Not understanding how your technology improves your business, implies that technology has become a necessity rather than an investment. A company willing to invest, knows that everything put into wise IT strategies directly impacts user performance, which affects your profit.
4. In which ways does technology contribute to improving operations?
Technology can help streamline virtually any part of your operations. By automating repetitive tasks or using technology to help workers complete their tasks faster, you can improve your operational efficiency.
If you know how your technology contributes to improving your operations, you have invested in technology. If you don’t know, it’s merely a cost. Leveraging great technology is a great way to increase productivity and reduce the effort of completing jobs.
5. Do you invest in new technology or equipment?
Is there anything more annoying than old technology or technology that doesn’t work? With regular investments in IT, you can ensure that your workers are happy and use the best tools to do their jobs faster and with greater ease.
Darrell Stepper, our StepUP IT CEO and President, knows if a company isn’t investing in technology when he does device discovery and finds a significant amount of equipment and software well past their end-of-life recommendations or contracts. Typically, the lifecycle of technology equipment is 3-4 years. Keeping technology for over five years—without any upgrades—is a good indicator that a company needs to allocate a budget to invest in IT and hardware platforms.
On the other hand, if most IT devices and software are newer and have maintenance contracts in force, he knows that technology is an investment for that company. Keeping your software and technology up-to-date and in tip-top shape is key for a company that sees technology as a way to improve efficiency and grow.
6. Do you know what the financial benefits of IT are?
IT can have many positive benefits on your finances, like enhancing revenue and reducing or avoiding costs and capital. If this is known, you have a great understanding of how your IT impacts your finances and results. If you know the financial benefits your IT provides, it’s an investment.
Measuring ROI is a common way of assessing whether an IT investment is worth it. An IT investment can also give you non-financial benefits, like better customer and user satisfaction, sales, forecasting, and streamlined business. Simply calculating financial ROI of your IT doesn’t paint the whole picture, because the benefits of well-implemented IT are often more far-reaching.
Turn business goals into reality with IT
The most common reason why companies see IT as an investment is because they’re determined to make it so. With a purposeful IT strategy in place and the technology to turn business goals into reality, you’re ensuring your technology is working with you, rather than against you.
Are you still viewing IT as a cost? By taking the time to read this article, you are beginning to understand the shift in mindset that is necessary to start making better strategic IT decisions. With the right Managed IT Service Provider by your side, your IT can help you improve productivity and efficiency—turning your company into a more profitable business.
Want help turning your IT into an investment? Contact us today!