Reducing Costs Through Technology
February 19, 2013
by Dave Moorman
For many small or medium business (SMB) owners, the concept of technology purchases is associated with spending money, not saving it. In reality, it’s entirely possible to save money with technology upgrades and services—not only on the technology side itself, but also in other departments throughout your operation. These savings are in hard dollars you can count—not the harder-to-quantify savings through the increased productivity technology enables.
Here are some examples:
- Save energy through virtualization: Replacing your existing servers with virtualized servers, either on-premise servers or in the cloud, reduces your electricity consumption and cooling costs (and also saves on costly office space). According to a report the U.S. government’s Energy Star site, server virtualization can reduce a firm’s server room/data center energy consumption by 10-40%. Furthermore, if your servers are cloud-based, employees can telecommute (work from home) full or part time, saving you even more office space.
- Cut payroll expense by outsourcing technology management: Not only does the virtualization mentioned above reduce your dependence on in-house server experts, but handing off system security, maintenance and other important monitoring tasks to a third-party firm will also reduce in-house IT staff expense. Furthermore, technology has become so complex that rarely can one or two people be masters of all its aspects. As a result, only very large companies can afford to have sufficient in-house expertise for all their processes. SMBs that outsource some or all of their IT management needs reap the benefits of a large IT staff—without the expense.
- Speed your network; reduce its financial toll: Another aspect of IT where firms save money is through managed networks. Rather than pay several thousand dollars a month for a dedicated T1 connection for each office, firms turn to third-party managed service providers. Redundant Internet feeds and network management services ensure 99.99% uptime for their Internet and network connections. This speeds the flow of work and increases productivity, of course, but it’s generally less expensive than dedicated lines—especially for firms with small satellite offices. In a 2012 article that ran in BizTech magazine, Houston-based firm PSC reported saving $500,000 when it switched to managed network services.
These are only a few examples of the hard-dollar savings you can achieve through technology upgrades and enhancements. In many cases, the savings are greater than the cost of implementing the technologies. Many firms have found themselves able to equip their staffs with iPads; hold employee loyalty events, and provide other perks to personnel with the savings they have achieved through technology improvements.