Jill Billhorn
Vice President
of Small Business
Nov 11 2010

Why Businesses Are Gaining Confidence

Businesses are using lessons learned to become leaner and more efficient.

Signs point to IT spending edging upward, which may indicate increasing optimism among small businesses. Although the economy remains somewhat sluggish, we’ve reached a point where companies should no longer postpone inevitable PC upgrades or technology investments that can help them become leaner and more efficient.

According to the August CDW IT Monitor, more than 27 percent of IT decision-makers at small businesses expect to increase their IT budgets in the next six months — up 8 percent from the same period in 2009. And the outlook is even more encouraging among midsize businesses of 100 to 999 employees: 57 percent anticipate IT budget increases over the next few months.

If there’s anything good to come from the recession, it’s that businesses have adjusted to the new “normal.” The tough times have taught leaders how to make their companies work more efficiently and do more with less. Now that economic recov­ery can be spotted on the horizon, it’s time for IT executives to apply those lessons to plot a successful course forward. And that involves harnessing technologies such as virtualization, mobile computing and unified communications to grow the business.

Savvy IT leaders understand they must consider making critical technology investments now to better prepare their companies to emerge stronger than before.

Managed Futures

Gartner research shows that CIOs from companies of all sizes can no longer delay IT capital expenditures, so they’re funding them at the expense of operating budgets. “Size certainly matters in terms of IT budget out­look,” says Mark McDonald, group vice president and head of research at Gartner Executive Programs. “Smaller firms report significantly stronger IT budget growth percentages than their larger counterparts. The larger the firm, the tighter it is managing its IT budget in general and IT operating expenses in particular.”

Small- and medium-size businesses have been especially cautious, eyeing the economy closely before making invest­ments. But many operate on three-year technology refresh cycles and have put off purchases for so long that their IT assets have already depreciated. Savvy IT leaders understand they must consider making critical technology investments now to better prepare their companies to emerge stronger than before.

Where to start? Evaluate your PC inventory, for one. Nearly 40 percent of the PCs in small businesses are more than three years old, and a large percentage of them are running older operating systems such as Windows XP, according to a 2010 report from research firm Techaisle. Older PCs consume more energy, incur greater downtime and cost more to maintain and support.

The percentage of medium-size businesses that expect to hire additional IT staff in the next few months

SOURCE: CDW IT Monitor (August 2010)

Next, turn your attention to optimizing your infrastructure. Virtualization can help organizations consolidate servers and make the most of that investment, not to mention improving their disaster recovery posture. Investing in mobile computing can boost the productivity of your workforce, enabling employees to work from home or the road. And unified communications implementations can foster collaboration and give workers enhanced capabilities to improve service.

Business leaders have reason to be optimistic about the future. When IT makes wise investments, small increases in budget can make a big difference in boosting the bottom line.

Jill Billhorn is vice president of small business at CDW.