Small businesses are increasingly finding it necessary to their upgrade PCs, websites and other IT infrastructure — even if they’re performing well — just to stay competitive with their bigger rivals and to comply with increasing government regulation.
“We compete against Staples, Office Depot, Office Max and Quill,” says Wendy Pike, owner and president of Twist Office Products, a Chicago-based independent supplier of office products. “Our customers expect the shopping experience on our website to equal that of these big competitors. Obviously, we do not have the capital to invest in our technology that these companies have. [So] we have worked on our front-end and back-end web store capabilities.”
Small businesses also have to upgrade PC and IT systems periodically to remain compliant with data privacy and other regulations, often presenting a budget challenge.
So these companies usually review their IT needs annually, with most upgrading their hardware every three to five years.
“An aggressive business will replace workstations every three years, but a four-year rotation is sustainable,” says Mark Shipman, president of CLEAR, an Anaheim, Calif.-based IT consulting company specializing in small business.
“When a business waits until computers break to replace them, they risk much more downtime to employees during that time,” Shipman explains. “They also miss out on any technology benefits in newer technology.”
But hardware upgrades increasingly have more to do with external factors than major advances in technology.
“I think hardware development has actually slowed in the last few years,” says Tim Singleton, owner of Strive Technology Consulting, a Boulder, Colo.-based IT consultancy that provides support for small businesses in the Boulder/Denver area.
“CPU’s are not actually getting faster anymore,” he explains. “They are merely able to process more at the same speed. Windows is requiring ever more amounts of memory just to run properly, but the price of memory has come down commensurately. The same can be said for hard drives. Everyone is generating more data, but hard drives are getting bigger at the same pace.”
End of software support
Most small companies are satisfied with their IT systems and are reluctant to change what works. But the choice is not always theirs.
“This quarter, we are seeing small businesses realize that Microsoft is ending support for Windows XP, Server 2003 and Exchange 2003 in April,” says CLEAR’s Singleton. “This is driving many companies to start the upgrade for those resources now.”
Some, however, don’t have to worry about upgrading their hardware because they’ve already moved to the cloud, an Internet-based operating system that is managed by a third party.
“Two years ago, we upgraded our operating system to be cloud-based,” says Twist’s Pike. “Having our provider host our operating system on their server in the cloud has given us higher reliability and speed.”
Alex Brown, chief executive officer at 10th Magnitude, a Chicago-based provider of advanced cloud solutions based on the Microsoft Azure platform, also believes that the use of cloud providers allows companies to take advantage of low-cost IT solutions.
“We outsource most of our IT to various cloud providers, and we look for ease of use and simple administration,” he says. “Since we ourselves are IT experts, a better example may be our clients, who outsource their custom IT software needs to us. They are looking for hassle-free maintenance, quick support, and security in addition to simple administration and ease of use.”
Some of the pressure to upgrade is coming from the company’s own employees, who increasing want to work remotely and use their own devices, or BYOD.
“What they really need to worry about is how to deal with users’ demands for desktops, laptops, tablets, smartphones, etc.,” says Singleton. “We have a wonderful opportunity for mobility and freedom; everyone wants to be able to work from everywhere. That availability is great, but making a company’s documents and resources [accessible on] different platforms and devices is the tricky part to tackle. That is what is so much different now than three years ago.”
CLEAR’s Shipman believes that these requirements drive up “costs to play,” and adding an essential process leads to compliance issues.
“Just accepting credit cards exposes small businesses to expensive yearly security audits,” he says. “These costs often force small business to outsource their IT requirements.”
Compliance regulations, e-discovery and other technology standards also force companies to adapt, often with substantial expense.
“The small business community is largely unaware of the compliance goliath they are actually subject to,” cautions Shipman. “I don’t think this will change much until owners start to hear about others’ pain in this area. In many cases, the technology required to maintain compliance in many cases will double IT costs for these businesses.”
10th Magnitude’s Brown recommends using the cloud to reduce costs.
“The shift of IT to the cloud has made that task easier, since it has allowed small business IT to rethink staff roles and realign that function with the specific, revenue-oriented needs of the business,” he says.
When outsourcing IT staff, small businesses should always consider nondisclosure agreements and review vendor companies carefully.
“Most [outsourcing] companies offer a nondisclosure agreement and pre-employment screening as a show of best effort to put an owner at ease,” says Shipman. “Periodic training on these policies and procedures needs to be happening and documented. An outsourcer should be able to open up their office and show documented evidence that these things are happening.”Tags: Business Management,Technology