Technology has the potential to be a game-changer for your business. But you need to take the time to think through the changes you require and invest based on your business needs, budget and your ability to assimilate change. Biting off too much at once can be disastrous whilst one step at a time will push your business in the right direction in no time.
It’s the start of a new year and the traditional time to think about what you are going to do with it. As a country we are facing some choppy waters ahead (somewhat an understatement), but that only means that we should all really think through our business could evolve over the year. After all, us SMEs collectively represent 52% of all private sector turnover and employ 16 million people, meaning we effectively have a shared responsibility to drive UK Plc forward.
We know life’s tough. According to the FSB Q4 2018 Small Business Index, confidence among UK small firms has fallen to its lowest point since 2011 with more than four in ten (43%) small businesses expecting their performance to worsen over the coming three months. But there is also an upside as the findings show that small businesses:
- are continuing to hire new personnel, with 16% taking on a member of staff in the past three months;
- are increasing pay, 68% increased pay compared to 2017, and
- have a determination to grow with half of small firms aspiring to grow their businesses over the next 12 months.
Not surprisingly, given this is an IT newsletter we are primarily concerned with IT planning. But, your technology needs to be considered in the context of your business – as a business enabler and not simply a cost to minimise. Think of it a tool to support growth by reaching and supporting more customers and reducing costs through improving efficiency and automation.
But growth wont occur unless you plan for it – in my mind it’s the activity of planning that’s beneficial more than a formal plan itself. Something that’s endorsed by someone more worthy than myself “Plans are of little importance, but planning is essential” ― Winston Churchill.
Of course, we have the BREXIT dragon looming this quarter that will affect some of us more than others, but all of us somehow. “It does not do to leave a live dragon out of your calculations, if you live near him.” ― J.R.R. Tolkien, The Hobbit. My last quote, promise.
The time of most impact on technology is when your business changes – you are growing (or shrinking) rapidly, you are moving into new markets or new premises or your current technology has just reached end of life.
In this article I suggest you think about technology evolution across four dimensions with security and data protection spread across all of them. We support businesses in many different sectors, in different stages of development and with between one and sixty staff. So our discussion here is pretty high level.
Software and Applications – innovation enabler
Software and applications drive the utility and value available through technology. So, its no surprise that FSB research shows that software and online investments had an 83% rating when asked about positive impacts on innovation.
If your business is still “management by spreadsheet” it may be time to move onto something more substantial and automated. Focus on the business tasks you need to achieve in the short term, how your requirements are likely over time and which other applications the software needs to integrate with. Select the software that will fulfil these needs and the ease with which it integrates with other business functions. You need to have the best software that does what you need it do with minimal tweaks and support.
IT Infrastructure, your computing bedrock
At some point your current infrastructure will just run out of steam and will need replacing and it’s a false economy to keep going with stuff that just doesn’t cut it anymore:
- Older hardware and software lack the critical security updates of their newer counterparts and so can put your business at risk; and
- As devices age, they run more slowly, freeze more often, and require more maintenance, resulting in additional downtime – which means lack of productivity and cost to the business.
When you are the point of change, rethink the way you use technology. We’ve seen some organisations who simply look at replacing old with new – an aging server with another new server, when actually a move to cloud technology could be much more beneficial. In general, moving to cloud based applications delivers immediate benefits, the software is always up to date, there is better access across your team and locations, often better security and all at a predictable and regular cost.
You should also consider the mobility of your users. Now might be the time to think about enabling users to work from home and / or from other locations such as with your customers. You might then be better to ditch those desktop PCs in favour of lightweight, robust mobile computing devices such as laptops and tablets.
Networks and Communications
Nothing happens in isolation these days as we live in an online world and changes we’ve discussed above can have a flow on impact to the communication capabilities you now need. Here are some things to consider:
- How quickly can you respond to requests and changes from your customers, suppliers and partners?
- Is your current broadband up to the job? We’ve come across some really great broadband / fibre providers with better pricing than the traditional providers. If you are planning a move, remember it can take 90 days to get a new line installed.
- What is the impact on your business if communications go down? Do you need to consider redundant circuits?
- Is your WiFi correctly set up to separate guests from your production systems?
- Do you have a firewall and is it configured correctly?
- If you access your systems remotely, do you have appropriate security in place, such as VPNs?
- Have you thought about moving your conventional telephone system to a voice over IP (VOIP)? VOIP can deliver cost savings in addition to providing more flexibility and portability.
Business, Information management and security
In this category we focus on the business processes and controls to manage your IT estate effectively and securely.
Many small businesses often sell themselves short by relying on their most tech savvy employee, or the business owner themselves to maintain and support their technology estate. Whilst others choose to focus on their core business and hand management of IT to specialised support firms – often reducing costs and gaining access to new technologies. Think carefully about the pros and cons of a DIY approach versus having expert IT skills pretty much on tap.
Cyber security is an ongoing issue that never goes away, and the bad guys keep coming up with new and innovative ways to steal, corrupt or lock up your data. Yet only 26% of small business have cyber security polices, only 19% have cyber security training and worryingly, only 18% have incident response plans. It makes sense that a core part of your planning should be to develop a multi-level approach to cyber security defences coupled with incident response plans in case your defences fail. We have written several articles on this topic and are not going to explore it further here. But as you change technology, you may also need to change or updated your related policies and processes.
As we are in a new era of data protection with the GDPR, you need to ensure that you have all the necessary processes and safeguards in place to ensure effective stewardship of personal data and the security of your systems.
So how much should I spend?
To get a handle on IT budgets we’ve looked at numbers from two global consulting firms who provide estimates of IT spending is as a percentage of top-line business revenue. Gartner estimate most businesses fall within a range of 2 to 5%. While Deloittes estimate technology spending as a percentage of revenue ranges from more than 7% in banking and securities firms to less than 2% in construction and manufacturing with an overall average for all industries of 3.28%.
These estimates should be considered as rough guides only and have been primarily estimated for larger enterprises – the percent spend for small organisations is likely to be higher as smaller businesses don’t have the scale efficiencies. They also need to be considered in tandem with business objectives and activities. For instance, if a major transformation of infrastructure or a new software application is being planned.
We hope that this article has been helpful to you and that you understand IT planning and investment is more than just a numbers game. The focus should be on transforming your business through using technology to enable growth and profitability.
Sources of statistics are the Department for Business, Energy & Industrial Strategy, Department for Digital, Culture, Media and Sport and the Federation of Small Businesses