By Ali Vafai
IT expenses used to be one of the hard-to-swallow costs that were always rising for new or growing businesses. After office space, new hires, computers and product development were accounted for, a huge budget for servers would hit small businesses hard—and that would be only the tip of the IT expense iceberg. Add in IT staff or contractor salaries, tech upgrades and maintenance, and the IT line item on the budget would balloon.
Many businesses are still sinking hundreds of thousands of dollars into IT infrastructure and following that up with the costs of staffing an IT department. But a new breed of business is re-imagining IT budgets, and looking to cloud computing solutions and subscription software to slash IT expenses, connect virtual or off-site employees, and offer scalable, seamless, low-maintenance IT solutions.
Here are three ways to slash your IT budget while investing in a scalable, low-maintenance IT model that will grow with your business.
Choose the Cloud.
The single most important decision a company can make is whether to purchase its own servers or contract with a cloud storage service. For Endeavor America Loan Services, which I co-founded with Darius and Mike Mirshahzadeh, the idea was a no-brainer. We had already founded and operated a previous company from physical servers and paid out the $250,000 in upfront server costs and the $25,000-a-month in IT bills.
We founded our technology-driven mortgage company with an ambitious growth plan and a largely virtual workforce. Going to the cloud was really the only option. The IT expenses are a fraction of the cost of buying, maintaining and dealing with the regular IT expenses of physical servers. In a company model that utilizes remote and virtual employees, the cloud provides the flexibility and functionality we need to connect our employees and systems no matter where they are physically located.
But even for companies where all employees work from the same office, the cloud is a way to drastically cut IT expenses. The cloud’s subscription model allows businesses to avoid paying the lump sum for a server purchase. It easily scales with a growing company, and it eliminates many of the ancillary expenses of IT, such as regular IT support, maintenance and server upgrades.
In March, Nucleus Research of Boston published survey results of nearly 200 companies using Amazon Web Services. According to the report, customers that moved to Web-based applications reported a 34 percent reduction in maintenance hours and a 32 percent decline in unplanned downtime.
Consider Software Plus Services.
Some companies are still buying software and storage piece by piece and then upgrading each program one by one, resulting in mounting IT expenses. A new option erases these costs. For a subscription fee, software-plus-services packages offer all the office software you need—word processing, spreadsheets, email, etc.—as well as file sharing, online conferencing and cloud storage.
Having the software, collaboration capabilities and storage rolled into one package is an IT dream in terms of software expenses and maintenance costs.
At our company, we use Microsoft Office 365, and it has made it remarkably easy for our business to scale by streamlining the IT process of setting up new workstations and new employees, whether they are remote or in the office.
Paper creates problems. Printer setups and document transfers are cumbersome when a company continues to rely on paper in a world that has gone digital. There still are some unavoidable situations where you must use paper, but setting up your company as paperless from the start can reduce your IT expenses and increase your staff’s productivity significantly.
Endeavor America Loan Services was founded as a paperless company, and that decision has cut out an enormous amount of paper scanning, printing, printer software and file transfer complications. With simple systems set up from day one to capture, check and share information in digital form, we eliminated that added layer of paper handling and unnecessary scanning, sorting and mailing. Software systems like Xerox’s BlitzDocs have enabled us to make paperless systems easy to manage and effective.
Once you have gone fully digital, the productivity you gain from your software systems will increase exponentially, while the IT costs of dealing with multiple machines, systems and applications will decrease.
Ali Vafai, featured in the photograph above, is the co-founder and president of correspondent lending for Endeavor America Loan Services.