But what about the counter arguments?

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In general, IT departments often get the blame for problems caused by outdated systems and/or software, even if the risks – and costs – of not staying current were made clear to both co-workers and management.

The clever IT manager makes a risk analysis and asks management to sign off the different risks as acceptable. Bullets on such a list could include for instance servers, storage, back-up, and security.

When it comes to maintenance and smaller add-ons, additional hardware and software etc , the IT manager often needs to fight for his share of the budget. Many SMEs invest in their IT once, believing that there is no need to include IT in the budget coming years. Sometimes it is hard to motivate these additional costs in the budget. One solution to even out investments over time could be to consider different financing options, thin-client solutions, or let a service provider deliver and maintain your customized, fully scalable, “pay-as-you-go”-cloud solution.

Published posts in the series “IT Strategy for SME”:
» Tip 1: Look ahead – invest in the cloud
» Tip 2: Invest in IT Management
» Tip 3: Consider IT an asset – and prove it
» Tip 4: Risk analysis and budget

It is of vast importance to value IT as a core asset and not just an added cost. With the right IT set up, companies can actually boost their business and gain a significant advantage over their competition.

In the future, business growth will come from smart and thought through technology management. This will differ out companies and give one business an advantage over another. Of course it depends on area of business, for some it may pay off to look into current problem areas or areas which have hurt in the past just as well as drawing up strategies for the future.

Return of Investment, ROI, is arguably the most popular metric to use when comparing different IT investments. SMEs could use this method to carefully evaluate which IT assets, systems and services that are necessary and provide a measurable return of investment.

In IT, time passes quickly and it is necessary to stay updated and current. Being outdated can hurt an organization and result in lower margins or revenue. Sometimes, staying at the leading edge is essential for a SMEs survival. The speed and flexibility of smaller companies help, just as the ROI calculations can help management and CIOs to better plan, budget and forecast technology projects that will affect the business. The returned value could be used as an indicator on investment attractiveness.

Put some extra thought in what to measure and how to quantify the value of those measurements into actual money. Gain an appreciated, streamlined and up-to-date IT department.

Published posts in the series “IT Strategy for SME”:
» Tip 1: Look ahead – invest in the cloud
» Tip 2: Invest in IT Management
» Tip 3: Consider IT an asset – and prove it

One way to avoid license headaches is to invest in efficient IT management tools, such as license management, software metering, software deployment etc. Or simply take advantage of the scalability of for instance SPLA licenses, rather than buying licenses of your own. Not only will you only pay for what you actually use and need, you will also be compliant.

To be non-compliant can be very costly for an organization, not only when it comes to hard cash, but also integrity, reliability and reputation. To own too many licenses is a waste of money and to own too few is ineffective.

Effective IT management not only helps the giants, small and medium size enterprises can cut their costs by investing in IT management too.

Are you worried about your company’s software compliance?

Published posts in the series “IT Strategy for SME”:
» Tip 1: Look ahead – invest in the cloud
» Tip 2: Invest in IT Management
» Tip 3: Consider IT an asset – and prove it

In a series of posts, we will list a few things for small and medium-sized businesses to think about in terms of its IT strategy.

Tip 1: Look ahead – invest in the cloud
Many companies have avoided cloud computing so far because they are afraid of losing control. During 2011-12, however, a big increase in the use of cloud services is expected and the significant proportion of this growth is will most likely to come from the SME segment.

“The Cloud” can deliver systems and services without tying up capital and no with no additional costs for maintenance and training. Many cloud providers offer solutions that suit smaller businesses. These solutions are often scalable where you only pay for what you need, which is very beneficial for smaller organizations who often are a bit more price sensitive and in need of more flexibility than large ones. SME’s simply get more IT for the money by outsourcing it to the cloud!

Are you afraid of loosing control of your IT if you outsource it to the cloud?

Published posts in the series “IT Strategy for SME”:
» Tip 1: Look ahead – invest in the cloud
» Tip 2: Invest in IT Management
» Tip 3: Consider IT an asset – and prove it

In order to use these established negotiation skills, always demand an itemized quotation, with all parts separately priced and specified. So far, nothing new for most people.

So, let me point to some areas of IT outsourcing (cloud technology, hosting, on-demand) where you can benefit from detailed study for a negotiation with your cloud provider.

In all these areas you must first create yourself an idea of ​​what is important to you and the supplier’s costs affected by your choices. Let me illustrate with a few aspects that affect your hearing:

Computer Hall
A data center that has all the functions of at least duplicate (electricity, cooling, Internet etc) and adequate physical perimeter security is obviously more expensive than one that does not. This investment the serviceprovider has already done, so his expenses are not affected by your choices. However, try holding down the number of computer sites for your tasks by utilizing vendor virtual servers because each U (a unit of space for a server in a data center) has a fixed cost.

• Negotiating Tip: Play down the importance of expensive redundant data center architecture for your applications.

Hardware
All programs running in the cloud requires a server. Even if you use virtual servers, you need a physical server to run it on. The capacity (and price) of a server is determined by its CPU speed, RAM size, the amount of data to store and how reliable you want it to be. How much of these resources you need determine the supplier’s cost.

• Negotiation tip: Ask for more capacity and reliability (redundancy) than you need, and be prepared to reduce your need for the hearing. Suppliers often go with the smaller margins for major deals. Are you a skilled negotiator, you can maintain margins despite declining volume.

Software (licenses)
If your solution require licensed software, thesupplier’s cost is generally fixed (the exception is major deals in which a separate negotiation can be done with the software manufacturer). Open Source solutions, however, has no license cost. You should ask your hosting provider if they have open source alternatives that offer you the requested functionality.

• Negotiation Tip: Start with a requirement picture with great license content even though you know you can get along with Open Source (Linux instead of Windows, MySQL instead of SQL Server, vtiger instead of Salesforce, etc.).

Competence and services
Different vendors have generally different breadth and depth of their technical skills. The more excellence and larger width of the skills, the more expensive to all comparable services it tends to be. However, you can “free ride” on the provider’s competence by not including staff-intensive services in your solution (managed hosting), but basically settle with the parts the supplier automated in its platform. This requires of course a little more of you, but if there are any problems there is expertise available. This can be invaluable.

• Negotiation Tip: Bring in a quote for a complete solution (totallty managed hosting) where the supplier shall be responsible for all monitoring, backup, maintenance, upgrades, etc. and give up what you don’t need at the hearing.

Support
Support Organisation for the supplier is usually a fixed cost that is not affected by your choices in the deal (although some charge extra for night watch etc). However, it is affected by how much you utilize the support. All suppliers have some clients who turn to them with questions that are not really part of the supplier’s commitment (but they often treat it). The supplier is making some assumptions about this for each new customer.

• Negotiation Tip: Explain that you have a competent staff that does not require much support and that you utilize standardized stable features that also requires little support. This does not usually have a fixed cost in the supplier’s estimate but reduces the supplier’s perceived risk. This often results in lower margins and lower price for the customer. This tip works especially good for customers who make additional orders.

SLA
Many providers offer different service levels (known as Service Level Agreements, SLAs). Parameters guaranteed uptime, penalties, response time, etc. specified by the SLA.

• Negotiation Tip: Choose a supplier that has one for you acceptable SLA level by default. Require more initially and give in during the hearing.

Finally, how do I know that these things really work? One could say that I’ve learned the hard way, by our customers!

According to the report “Cloud Computing Helps Accelerate Green IT” by Forrester Research, service providers promoting the green benefits of cloud technology focus on energy and resource efficiency rather than renewable energy and e-waste (Waste Electrical and Electronic Equipment, WEEE) The latter being two very important factors of a truly green IT department.

The independent research report proves the cloud to be a greener and more efficient IT environment offering optimal use of finite resources such as space, power, and cooling capacity. Self-service and pay-as-you-go concepts encourage users to consume exactly what they need. Economies of scale and sharing cloud environments between several users optimize energy use and infrastructure resources. Consolidation, virtualization and automation of cloud data center environments help to reduce the physical server footprint.

IT professionals are encouraged to take advantage of cloud-based server, storage, and network infrastructure, IaaS (infrastructure-as-a-service) to minimize environmental impact and maximize green benefits including lower energy costs, carbon emissions, and e-waste.

Unfortunately, the Forrester report indicates that renewable energy sources, e-waste policies, and other green factors tend to be subordinate to price, features, and reputation. And even the most energy-efficient data center has a significant carbon footprint unless it is powered by renewable energy sources.

“Just because cloud minimizes e-waste upfront, don’t assume those managing cloud-based infrastructure have policies to ensure e-waste is redeployed, resold, donated, or recycled” warns the Forrester report and encourages IT professionals to make demands and put pressure on the service providers.

We couldn’t agree more. We are proud to lead the way and influence the industry. That’s why our TotalCloud Solution is powered by 100% renewable energy from wind power. Naturally, we have a corporate environmental responsibility policy. From duplex printing to recycling and disposal of e-waste.

Because cloud computing is only truly green if, and only if, the service provider includes e-waste and renewable energy as part of the package.

In today’s business environment it is important to offer flexible systems and user friendly interfaces. No matter what position you have, or what work you perform, each company should have a communications system that is not limited in terms of geography or long service times. An intuitive system without complicated settings, that works in all situations, at all times. With such a PBX system, companies can give good service to their customers. And it’s usually good service and soft values that determine if a company has satisfied customers or not.

There are many virtual services on the market that delivers just that. One is Servage TotalCloud Unified Communications, an operator-independent virtual PBX solution with support for both Mac and PC, softphones, iPhone, Android, Windows Mobile and Symbian phones. All that is required is access to either the Internet or a mobile network.

The estimated time-savings for a successfully implemented virtual PBX solution is about 10 – 15 minutes per day per person. Regardless of the number of people that work at the company. Time that can be used to increase service levels and customer satisfaction.

Contact us and we will help you estimate your savings. In addition, we will reduce your roaming costs, during business trip as well as vacation.

If you are a small business owner or IT manager, there is another – more troubling – aspect of holidays and vacation. And it’s not the dark rain clouds we usually are afraid of at midsummer. The question that arises when your staff goes off to a well-deserved vacation: Who will handle the IT support, and what do you do if there is a problem?

Some may not care because they assume that their customers are also on vacation. Others create opportunities and are doing business online, around the clock. The latter is entirely dependent on reliable IT for both their image and their business.

Even if your systems are not externally exposed to the Internet problems with disk failures, inadequate procedures for backup or inadequate physical security may cause major damage. This is when a different kind of cloud may be your best friend. Those that outsource their IT to the cloud can safely enjoy both herring and snaps.

Cloud companies, such as Servage TotalCloud, take care of monitoring, backup and physical security while replacing broken disks, overheated processors, etc. In the meantime your staff can enjoy their holiday. Buying IT as on-demand services from the cloud is not only good for your peace of mind, but cheaper and better as well. Your company eliminates all IT investments while increasing service levels. IT support is included, 24 hours a day, even at midsummer.

We often get the question: how can we take advantage of the cloud?

The answer depends almost always on who is answering when it should be based on who is asking. Let me therefore make an attempt to illustrate this from a few specific situations:

The shoes are too small – the company outgrows its website

This problem occurs when a company succeeds very well. A nice problem it may seem. But if are you responsible for a business that has invested much time and money in building a customer base you cannot serve, you risk losing everything.

Practical benefit from the cloud: Subscribe to a personal cloud that can grow with your business and also provides redundancy and uptime guarantees.

It’s getting messy in the closet – complexity and maintenance cost escalate

When companies grow IT systems tend to increase in numbers, the integration challenges multiply, the overview decreases and the cost of simply keeping systems running increases – without any additional benefits.

Practical benefit from the cloud: Let a cloud company that understands outsourcing tailor a customized solution, as far as possible based on their standard offering. Spice it up with customer-specific functions, possibly in a personal cloud for maximum competitiveness.

Things are always in the wrong place – the information is not available when needed

When the sales rep is at the customer site he cannot access the latest company presentation, which is on the file server at the office, the financial manager cannot run reports from the ERP system from home, the technicians cannot restart a dead server from home.

Practical benefit from the cloud: Ask a cloud company to construct a solution which allows you to access all information and systems from any Internet connected computer or smartphone. Choose between web-based applications or a terminal server solution that gives you your own personal desktop from any location.

Negative surprises – not only are things not working, they also cost you extra

A backup has failed, virus has spread in your e-mail server, the systems are down because the disk is full and require maintenance.

Practical benefit from the cloud: Make sure that your cloud provider guarantees the functionality with an SLA. Instead of surprising extra expenses due to a disturbances you should have your money back.