Information Technology (IT) comprises a major portion of many Small and Medium Business (SMB) operating budgets. With the impetus on reducing operating costs and increasing profits, SMBs turn to cost-cutting measures in various departments. One of the most common areas to focus on is with IT costs. While the “sticker price” of computers appears to be decreasing, the increasingly complex and integrated nature of business networks necessitates experienced IT support and these labor costs can significantly out shadow hardware costs. Smaller companies, in particular, are generally in a quandary over their ongoing struggle to properly source their IT support, since they lack the in-house expertise to handle the tasks internally.

With companies gradually turning away from “traditional” methods of conducting, operating, managing and performing business functions; technology and communication systems are at the core of the entire process of sharing information and business growth. Today’s businesses are increasingly reliant on e-mail, hosted applications (e.g. SalesForce), shared databases, and networking equipment (e.g. servers and routers) in order for daily operations to function. These integrated solutions, network security, network management, infrastructure maintenance, disaster recovery, data storage, and network monitoring generally consume 60-70% of annual IT budgets for most organizations. Simply stated, this means 2/3 of IT budgets are consumed in maintaining the current IT infrastructure and only 1/3 of IT budgets are utilized for upgrading and actually improving the competitive advantage of the company.

This evolution in business processes makes companies of all sizes vulnerable to security issues such as hacking, exposure to malicious software (malware) (e.g. viruses and spyware), denial of service attacks, data compromise by both employees and hackers, spamming, and data loss due to natural and man-made incidents. Whether it leads to temporary business downtime or the loss of critical business information, SMBs need the experts and the resources to cope with these challenges.

What can business owners and managers do? There are a few key deciding factors to keep in mind:

§ Develop a business-focused IT strategy: With IT plan development, management must factor in the nature of their business, their strategic growth, and their business requirements. An IT strategy should be featured in the company’s business plan.

§ Resist the urge to react: Always consider the bigger picture. What are the driving issues for your business: changing business plan, emerging technologies, strategic vs. tactical challenges? Preventative maintenance and planned IT purchases are proven to save companies money.

§ View IT as a critical asset, not a simple tool: Formal policies and contracts are forged for how employees sign for paper clips or how they can use a company vehicle. However, most SMBs completely neglect the importance of formal IT and Information Security (IS) policies to protect their business. Without IT, businesses will fail. This severity necessitates a formal approach.

An IT strategy is really a roadmap to keep a business “on course” with managing its information assets (e.g. computers, printers, server, etc.) and its information resources (e.g. data). This is a concerted effort between management and IT staff, since both opportunities and threats constantly evolve. Where a plan benefits a company’s bottom line profitability is in reducing poorly planned purchases, improving efficiency by pairing the proper equipment with job functions, and reducing reactive maintenance costs.