Why is it so hard to predict technology expenditures?
There are so many obstacles that can arise from the cost of rapidly evolving software, the need to respond to changing requirements in your organization, software licensing, perpetual enterprise software issues, hardware problems, connectivity struggles, and security challenges.
How does a business keep up with them all?
Types of technology costs that impact your business
Before we talk about the unknowns around the costs of your company’s technology, let’s first discuss what those costs are.
Here are some common, and unpredictable, technology costs that can affect you:
- The unexpected cost of acquiring or upgrading servers or other hardware.
- The added expense of hiring an outside technician to perform repairs to your network or infrastructure.
- The unpredictable impact of implementing expensive software.
- Added costs from not analyzing the correct software for your company.
- A technology implementation that went bad because of poor performance.
- Rollout issues for your software and challenges related to upgrading core software that your company relies on.
- Requirements not being met from a lack of strategic technology and IT planning.
- Software that takes longer to deploy, causing inefficiency and lack of productivity.
- Hardware costs, software costs, security costs in order to keep data safe.
There are a myriad of reasons as to why these unpredictable technology costs creep into your business. Does it really matter why, though?
What you and your business should be concerned with is how to resolve and plan for these challenges, because they will continue to arise if you don’t have a roadmap to deal with them.
Why predictable costs are important to know (the unknowns)
The more exact your budgeting, the more predictable your cash flow and the easier it is to manage your offices IT network.
But, how can you reliably budget for the unexpected?
To minimize unplanned chunks being taken out of your budgets, there are some things you can do to best predict unplanned IT issues and those resulting technology expenditures.
- Have a strategic plan. The best way to tackling unpredictable costs of technology is to have some sort of documented plan. And that plan doesn’t have to cost you a million dollars to create, either. We’ve seen fantastic IT strategies written in a simple outline. (we’ve seen them written on the backs of bar napkins, too)
- Automate through the use of SaaS and cloud-based solutions. Subscription-based technology solutions are easy to digest, typically have a lower barrier of entry cost to your business, and are replacing perpetual licenses. (it’s expected that 80% of software vendors will adopt subscription as a primary licensing model by 2020) Cloud-based operating models also position themselves better for cost optimization and increased competitiveness, according to technology resources like Gartner.
- Have a plan to seek the lowest possible hardware price up front. Working with the right technology vendor can help you combine multiple budgets or technology solutions into one transaction which maximizes a volume discount.
- Don’t pay for every license up front. If you DO have software thats license-based, be sure you’re paying for licenses only as you deploy them. Also, don’t be afraid to negotiate your software purchases and try to take advantage of end-of-quarter incentives from your software suppliers. Again, only pay for your licenses as they’re are deployed because this lets you match your expenses to your available budget.
- Customize a deployment schedule to fit your budget. Look for an outsourced IT and technology partner who will tailor your deployment schedule to fit your needs. You’ll be able to spread expenses to meet your budget requirements and free up cash flow, if need be.
- Choose an IT and technology partner that does this for you. Even though there are expenses that are unpredictable, you can still get a grasp on what to expect from a cot perspective by having some sort of guideline so you’re not wasting money. Having a good technology vendor who understands your budget pressures can make your IT expenditures easier to swallow.
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Explore how you can solve unpredictable and unknown technology costs inside your business.