But what about the counter arguments?

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The bad news is that your company is likely to be outmaneuvered by companies that have a mobile business model. Companies that can hire the best and most suitable employees wherever they happen to live or wherever they want to work will have a huge competitive advantage in today’s knowledge based society. Simply because this is possible without any drawbacks. It’s just as true as the fact that a fast and strong hockey player is better than a slow and weak.

The good news is that by correcting the basics of your business model you’ll probably get a lot of other benefits as a bargain. This is actually a statistical fact.

Why is this? One of the foundations of a mobile business model is to make it independent of physical premises. The absolute easiest way to do this is by purchasing all IT and telephony as on demand based services from the cloud. Or if you prefer to call it a modern version of outsourcing your IT. This not only provides you with an infrastructure independent of physical locations it also enables distributed and even global workgroups. Regardless of where an employee is, they can have access to all information and all your IT and telephony tools.

What other benefits do you get? Statistically you will lower your IT and telephony costs by 30-50%, have a more stable IT environment and free up capital. You could get worse bad news!

In general, IT departments often get the blame for problems caused by outdated systems and/or software, even if the risks – and costs – of not staying current were made clear to both co-workers and management.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

Servage configures a new IT environment in TotalCloud, which is deployed before the old one is taken down to ensure a seamless transition. Durgo gets an IT environment that is fully scalable, does not require any capital expenditure, and has a guaranteed reliability and 24/7 support.

“For me, as responsible for Durgo’s IT environment, it was important that Servage could take care of everything and guarantee the reliability in a written SLA” says Hans Hansson, Technical Director at AB Durgo.

Servage TotalCloud delivers the following components to Durgo:
• Server Environment – Virtual TotalCloud servers whose performance and number can be adjusted on demand
• Cloud ERP – Business system software for the manufacturing industry installed in TotalCloud
• Remote Desktop
• Mail and web mail
• Web hosting
• Cloud storage of data
• Virtual PBX
• Firewalls and IT security
• Backup of data
• Monitoring – Proactive Monitoring around the clock
• Management and upgrading of systems and patches
• IT-Support

“Servage could offer us a complete solution and has taken their time to get acquainted with our situation in depth. We feel that they really understand our business needs. We also expect to save a substantial part of our IT budget “says Hans Widell, Managing Director of AB Durgo.

“Durgo has made their procurement thoroughly and let several suppliers compete for their business. We are therefore pleased that we, in tough competition, won their confidence”, says Ari Liukko, CEO of Servage AB (publ).

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

“For me, as the CIO at Valbay, experience and competence is extremely important. The fact that Servage had an up-time of 99.99% and was best in class in the last independent test was a crucial factor when I evaluated their skills” says Olle Billinger, CIO at Valbay.

Servage TotalCloud delivers the following components Valbay:
•    Virtual Desktop – Remote Desktop and local Windows installations
•    Group Software – MS Exchange and Sharepoint
•    Printer management
•    Cloud Storage of Data
•    Network – 1 GB black fiber connects the bank with data center
•    Server Environment – Virtual TotalCloud servers whose performance and number can be adjusted as needed
•    Operational Systems – Portfolio Management Systems, etc. installed in the cloud
•    Communications – Secure Communications towards for example banks
•    Firewalls and IT security – of great importance for all IT industries, but particularly in the finance business
•    Backup of data
•    Monitoring – Proactive Monitoring around the clock
•    Management and upgrading of systems and patches
•    IT Support

“We chose Servage since they have a proven and guaranteed reliability, and because they could give us a complete solution at an attractive price,” says Anders Ekborg, CEO of Valbay International AB.

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!

Accounting Act requires you to register and report your IT equipment. Something that can be both complicated and time consuming. Please enjoy these five tips on how to get 100% control over your IT inventory ledger. And get time and money left over for other things.

1. Rent your servers and you don’t have to  …
a. worry about inventory lists
b. spend money on servers and / or licenses
c. worry about upgrades of security patches, etc.
d. worry about maintenance since you are hiring a working solution

2. Rent your workplace function instead of buying computers and avoid to …
a. worry about inventory lists
b. spend money for work stations and licenses
c. drop in productivity when a station malfunctions, rather than letting the supplier replace it with a new one

3. Do not invest in a backup robot and you don’t have to …
a. worry about inventory lists
b. tie up capital in a backup robot or licenses to the same
c. pay for someone who ensures function the days you need to recover lost data

4. Do not invest in your own PBX system and you don’t have to …
a. worry about inventory lists
b. spend money and tie up capital in a PBX
c. let any of your hire to learn how to manage the

5. Sell all your existing workstations, servers, etc  to your cloud provider and avoid to …
a. worry about inventory lists
b. limitations in flexibility, scalability and capacity
c. tie up capital in your IT environment