How to Adjust to Evolving Technology Costs & Avoid IT Spending Mistakes
By Eric Edwards | September 20, 2022
As the ball dropped in Times Square heralding the start of 2022, a once technological juggernaut passed quietly into the history books—BlackBerry. Within two decades, Canada’s once ubiquitous smartphone company grew until another eponymous fruity IT company introduced its iPhone. For years, BlackBerry clung on like ivy on a stone wall, but Apple’s shadow (and versatility) couldn’t be touched.
Today, the pandemic has sped up companies seeking to find even more versatile IT solutions to accommodate hybrid work environments and faster processes, while still protecting against increasing global cyber threats. It’s enough to make an IT staff overdose on their Mountain Dew.
IT spending mistakes
According to research firm Gartner, worldwide company spending on IT products, services, and staff is expected to reach $4.5 trillion, up 3% from 2021. In the same article, John-David Lovelock, Gartner’s research Vice President, said, “Organizations that do not invest in the short term will likely fall behind in the medium term and risk not being around in the long term.”
Consequently, the likelihood of IT spending mistakes is even greater today with more serious consequences. In a Wall Street Journal article, IT professionals on average self-estimate a 25% waste in IT spending. When the pandemic happened, many companies raced to “lift and shift” all their technology resources into the cloud not realizing some apps needed modifications (such as email, collaboration tools, and data storage). These apps do not need to constantly run once uploaded into the cloud.
The result? On average, companies unknowingly overspend between 30% to 40% on their cloud usage costs.
Here’s where they switch from Mountain Dew to something more potent.
Technology costs and IT spending benchmarks
A business uses technology to streamline processes to save time and operating expenses (unless you are my ophthalmologist who’s enamored with handwriting receipts on triplicate carbon copy forms in a spiral book).
According to an article in the May 2022 issue of CIO Magazine, companies are earmarking more budget money for IT to beef up cyber security, automate processes, and improve customer service experiences.
Here are typical annual IT budget benchmarks per a company’s size:
- Small business (less than $50 million in revenue): 6.9%
- Mid-size business ($51 million to $2 billion): 4.1%
- Large business (More than $2 billion): 3.2%
The onset of the pandemic initially reduced these percentages as many IT managers enacted a “wait-and-see” approach but have since rebounded. However, IT spending benchmarks should increase significantly in the coming years as companies race to successfully compete while accommodating for greater security.
10 apps every midsize business should have
The software needs to run a mom-and-pop donut shop differs from a mid-size regional operation, or a multi-billion-dollar global conglomerate. Whether the company tracks inventory or tracks time with a client, every industry (and every company) has different IT requirements.
Nonetheless, let’s look at the types of typical applications essential for a midsize business operation.
- Website Builders (Divi, Elementor, Oxygen, etc.)
- Cyber Security (SolarWinds, Intruder, SecPod SanerNow, etc.)
- Accounting (FreshBooks, NetSuite ERP, QuickBooks Online, etc.)
- Time Tracking (Wrike, ClickUp, QuickBooks Time, etc.)
- Communication / Collaboration (Slack, Google Workspace, Microsoft OneDrive, etc.)
- Customer Relationship Management (Salesforce, Hubspot, Zoho, etc.)
- Sales and Marketing (Hubspot, Zoho, Nutshell, etc.)
- Project Management (Asana, monday.com, Trello, etc.)
- Payment Transactions (Runit RealTime, Chargebee, Square, etc.)
- Social Media (Sprout Social, Hootsuite, Buzzsumo, etc.)
For the three applications listed in each category above, there are another dozen more, each with its own pros, cons, and price points.
Some integrate seamlessly with other applications while others may require extensive and costly application programming interface (APIs) modifications to have the desired outcome for a company.
Importance of having the right technology in place
Here’s a modern-day IT fairy tale:
“Once upon a time, a company purchased an enterprise application and after a breezy install, every employee learned all they needed to about the application before Go-Live. Then, someone pushed a button, and (poof!), everything worked perfectly. The End!”
When it comes to launching a new enterprise-wide application, most of us can recall at least one tale that would make even Stephen King flinch. Unfortunately, these horror stories often begin because the people, processes, and technology not being coordinated from the start.
And, despite how great your IT staff is, the system and application configuration are always going to be somewhat complex. Many times, new applications conflict with legacy applications or hardware incompatibilities that will create instability problems. These issues often can’t be predicted until the switch is turned “on”, and the IT department can respond accordingly.
However, regardless of these potentially troubling situations, enterprise applications have tremendous power to affect positive change for a company not only through its streamlining of processes but through the company’s culture as well.
A company like Una can consult with a company’s IT or Purchasing department to ascertain which application(s) will work best given a company’s goals and current technology state. Rarely does a silver bullet exist that can fix an IT challenge by itself. Instead, the solution often is a combination of people and things working together toward the same goal.
Join Una and gain access to a vendor management platform to benchmark current technology costs and compare services to find cost savings. Request a complimentary spend analysis today.
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