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Outdated Technology Costs Businesses More Than It Saves
In today’s speed-of-light business environment, owners and managers regularly find themselves faced with tough choices on where to best allocate cash to keep things running smoothly. Personnel or inventory? Office space or advertising? Outdated technology or product development? The list goes on.
Faced with competing financial demands, smart business leaders are always looking for ways to conserve cash and cut costs. Unfortunately, many choose to put off expenditures like a new server or new computers, hanging on to aging hardware, software, and peripherals far too long. What they don’t realize is that this is actually costing them more in terms of security risks, lower productivity, and increased maintenance costs required to keep old devices running past their expiration date.
There’s no doubt that effectively managing cash flow is important for the overall health of a company. That being said, technology is one area that shouldn’t be neglected.
Here’s why holding on to outdated technology too long can cost your business more than it saves.
See these 7 cost saving technologies in Construction.
You’re vulnerable to security threats
Older hardware and software lack the critical security updates of their newer counterparts. In 2017, there were a record 1,579 data breaches, according to the Identity Theft Resource Center. This is a 44.7% increase since 2016. Alarmingly, a Ponemon Institute study found that nearly 70% of workers feel their company’s security solutions are outdated and inadequate.
The bottom line? From a security standpoint alone, companies that cut corners on updating technology stand to lose a lot more than they gain.
Productivity takes a big hit
A 2016 survey found that U.S. businesses lose up to $1.8 billion each year in wasted productivity due to obsolete technology. As devices age, they run more slowly, freeze more often, and require more maintenance, resulting in additional downtime. They also lack the power needed for new, efficient software programs that can help increase business productivity. On the wish lists of U.S. workers who were surveyed the following desires stand out: the ability to automate non-essential tasks, more mobile-friendly devices and the ability to use cloud-based apps to access work documents…all of which help them complete tasks at a faster rate.
You’ll lose customers to the competition
According to a recent Microsoft survey, over 90 percent of people said that dealing with a company that uses outdated technology would cause them to consider taking their business elsewhere due to concerns over security, privacy or user-friendly convenience.
But there’s actually some good news here. Updating technology does not require a large outlay of cash like it used to.
Thanks to Hardware-as-a-Service (HaaS) and Software-as-a-Service (SaaS) programs, businesses can easily stay up-to-date on their technology while avoiding a large up-front investment. Under a typical HaaS or SaaS agreement, an IT Managed Service Provider (MSP) provides, installs and maintains the IT infrastructure for a business for a more digestible monthly fee.
Even better, the technology is no longer considered a capital expense at tax time. Instead, it becomes an operating expense and in many cases results in a 100% annual tax write-off.
With HaaS and SaaS programs in place, a company’s servers, desktops, notebooks, and software licensing are all maintained by the MSP. In a world where technology evolves at a faster and faster rate, these programs are not only an attractive option; they are now the ideal solution for savvy businesses.
Typical benefits of HaaS and SaaS programs
No upfront investments or “surprise” expenses. All of the technology a business needs to run smoothly and efficiently is included in easy-to-digest monthly payments. A fixed monthly cost enables businesses to effectively budget for technology expenses, since maintenance and upkeep are included.
Improved security. Critical updates are handled automatically, protecting your business and your customers from threats. Newer technology brings greater peace of mind as it brings with it more secure backup and disaster recovery options.
Flexibility. When a business expands, its technology needs to expand too. Fortunately, HaaS and SaaS programs are inherently scalable and flexible and serve to protect a growing company from the hit of a large cash expense as they scale up.
Worry-free monitoring and maintenance. The MSP handles 24/7 monitoring and regular maintenance of a company’s hardware and software, allowing you to focus on running your business, not your technology.
Before jumping into a new technology purchase or HaaS/SaaS program, it’s important to complete a thorough network assessment to examine a company’s needs from top to bottom. The assessment should take a look at all office locations, servers, data backup systems, firewalls, users, devices, applications… basically anything and everything that pertains a company’s network. This will reveal where a company’s network is performing well, where it is underperforming and where it’s most vulnerable. The resulting technology strategy should also take into account both current network needs and any plans for future growth
Sean Ciampaglia
Sean has a Bachelor of Science in Mechanical Engineering from the University of Toronto. He is the General Manager at Geoscape Contracting, and has been actively managing projects in the land development industry for over 10 years. He realized in 2015 that there must be a better way to do contract administration in order to minimize mistakes and save contractors and consultants time on their paperwork. He's a father, an entrepreneur and habitual crossfitter. He enjoys roasting coffee beans and uses the pour-over method to brew his daily cup.
