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It takes money to make money, even with technology!

it capex vs opex

We have all heard the adage, “it takes money to make money”, and this holds true even with technology.  Lack of proper investment in technology strategy and services is the second leading cause of poor business results.  Lack of investment in people is the first.  People depend on technology to get their job done, so they are closely related.

Are you investing a proper amount in technology?

This is a question many business managers blow off.  They gauge technology on whether “it’s working or not”, and “if it ain’t broke, don’t fix it”.  This approach works well regarding capital-oriented investments, which technology no longer is.  Technology is an ongoing investment that should be gauged based on revenue, much like human capital is regarded already.

Three signs you are not investing a proper amount in your technology:

  1. You spend the same amount (as % of revenue) on technology as you did five years ago
  2. Technology investments are still in your capital budget, and not operating expense
  3. You are based technology purchases on REACTIVE needs and not planning for proactive replacement of equipment

Technology investments should be ongoing and tied to revenue.  Many business managers are reluctant to add any monthly expenses to the P&L, but this is the way the world is going.  Everything is moving to a a consumption-based, utility model.  Riding out that Exchange server for another year, or workstations until they literally crash is not an option for a properly managed business.

We often see spreadsheets attempting to justify a capital intensive purchase of hardware or software.  The reality is that even the hardware/software vendors don’t want you to do this anymore.  Find a partner that will provide you with a solid strategy tied to your business results, and watch your business profits increase!

 

 

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