The Hidden Costs of IT

Three Business Blog Team
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On: 14 May 2015
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Managing IT costs in a small-medium business can be challenging. Here we outline four factors that are often forgotten or overlooked.

1. Security

The initial expense of a corporate firewall or desktop anti-virus software is relatively transparent. Even the costs associated with ongoing support and maintenance of these systems are largely well understood. But the cost of a security breach – like a hack or malware infection – is much, much harder to predict. Few businesses expect to be hacked, they do not budget for such an eventuality, let alone cost such a breach properly.

IBM estimates that security breaches cost up to $246 (€220) per compromised record. For a very small database, say 2,000 contact records, that equates to $492,000 (€438,750) – a cost few SMEs can afford to absorb.

Outsourcing security, or choosing outsourced systems that include enterprise-grade security provisions is a cost-effective way to avoid common breaches.

2. Paper and de-centralised systems

We all know how costly paper is. From the cost of physically printing a document to the time spent hunting down a specific print-out; having paper in your business processes can be a costly approach. The consumables used in printing may be easy to track and budget for, but what about the inefficiencies of using paper to communicate important information between employees?

It’s not just paper either. Digital or not, personal spreadsheets are the modern-day equivalent – silos of data that quickly get out of date, or which are unavailable to every stakeholder. According to Ventana Research, 11% of businesses have multiple versions of the same spreadsheet in circulation, none of which agree. Little surprise then that 56% of users report that combining spreadsheets is a time-consuming chore.

IDC research suggests workers already spend nearly 36% of their working week consolidating and looking for information, which has major implications for the company bottom-line. Replacing manual paper-based systems, or individual spreadsheets and documents with a centralised data sharing platform or a mobile data collection system will significantly improve internal business processes and ensure your employees have access to the information they need, when they need it. The ideal business model is to have one version of the truth when it comes to all of the information you use.

3. Off-site factors

Additional costs can accrue once you start to expand operations outside the office. Routing incoming calls and data to mobile workers can be expensive depending on the systems involved and the plan you have in place with your mobile carrier. Where internal calls are routed over mobile networks, for example, call costs could quickly escalate beyond expected levels unless you work with your mobile service provider to put in place an appropriate call and data plan.

It is important also to think about fixed and mobile telecommunications as a complete environment. Considering, for example, a cloud-based Unified Communications (UC) platform to replace existing on-premise solutions may help to better control costs for more accurate budget management.

4. Licensing

As soon as your business expands to more than one computer or implements an in-house server, you will encounter the issue of software licensing. Boxed software like Microsoft Office is bundled with the necessary licenses for you to use immediately, but other systems are not quite so clean cut.

Do you use an onsite Microsoft Exchange email server? Then you need a license for the software installed on the server, along with a Client Access License (CAL) for every user who accesses mailboxes on the system. In some cases you may find that one CAL is included with your copy of Microsoft Office, so long as you have a version that includes Outlook, but then you may not have enough CALs to match the number of licenses.

Sound confusing? Now bear in mind that there are dozens of variations of this same scenario for the other software you use in the business. Getting licensing levels wrong is incredibly easy, but the penalties for doing so are incredibly stiff. To avoid problems, your business needs to regularly audit license levels, or move to a simplified alternative like cloud-based software that ensures you always have all the licenses you need.