May 29 2012

SMBs Make IT Investments Today to Help Tomorrow’s Bottom Line

Smart technology managers spend with an eye toward achieving savings they can reinvest in their future.

Small and medium-sized business owners are cautiously optimistic this year. With job growth slowly improving, many SMBs have begun moving forward with IT investments.

The recent CDW IT Monitor found that 46 percent of IT decision-makers say technology will be a top priority for their organizations in 2012. Another 37 percent expect to consider large IT investments before midyear, and 23 percent of medium-sized businesses want to hire additional IT staff.

But even though businesses are ready to spend on IT, that doesn’t mean they have money to burn. Today, every IT investment — every investment, period — counts. Smart companies are looking for IT products and services that save money, which can be reinvested in even more productive technology.

Take Apigee, a Silicon Valley startup. Last year, the company phased out its data center and turned to a public-cloud provider for server and storage needs.

Percentage of small businesses that expected to replace hardware during the first half of 2012

SOURCE: CDW IT Monitor, December 2011

IT Systems Administrator Long Nguyen pumped the savings back into new technology, including high-end notebooks, a wireless network and high- definition projectors for conference rooms.

“It’s hard at a startup,” Nguyen says. “You buy used monitors and used everything. Before it was ‘recycle this’ and ‘recycle that,’ and keep spending under a certain amount. Now, I have more flexibility.”

The Right Connection

PSC, a Houston-based waste management company with 100 offices nationwide, sees savings of nearly $500,000 a year from a new IP-based wide area network.

Jim Burns, CIO and chief technology officer at PSC, says the company was spending $1 million a year on a traditional WAN running T1 lines.

With the old system, one T1 line served each office, so if an outage occurred, downtime could last one to three days. “We lost a T1 connection about once every two weeks,” Burns says. “It was not good.”

Now, PSC subscribes to two IP connections for each office. If one goes down, the other takes over within 5 to 8 seconds. The new WAN saves money and delivers higher performance, which lets the company funnel the savings into other tech projects.

PSC plans on buying new tablets for mobile employees, and it’s also buying software to improve workflow and maximize business analytics.

Apigee and PSC represent a trend in IT spending among businesses. But companies can ill afford to be reckless in today’s business climate. Wise business leaders know to take the right risks if the potential exists to reap benefits in the long term.