When economic times get tough, it’s necessary for small and medium-size businesses to reevaluate the budget and in some cases tighten the proverbial belt. Most importantly it means thinking strategically about how best to spend, and save, in a recession. Your information technology department is a good place to start.
Doing this means taking a comprehensive view of organizational expenses and prioritizing. Understanding which technology investments help to increase productivity and better serve clients is the first step. Continuing to fund these strategic technologies during an economic downturn is very important. With a recession technology plan in place, your organization can survive, and even thrive, within this turbulent economy.
Here are three steps to take when putting together your IT strategy for the slowing economy.
Step 1: Reevaluate Your Needs
Treat recession planning like budget planning. Changing economic conditions require a change in thinking. Just as you reevaluate your expenses from the previous year when planning for a new fiscal year, you need to reevaluate your current operating budget during a recession. Ask yourself the following questions:
- What technology must be maintained or implemented that makes you indispensable to your customers or members? Your target markets will be feeling the recession too; you want to make sure their relationship with your organization continues by providing efficient, affordable, and high-shelf service.
- Do you have technology in place that is instrumental in helping you attract new customers and retain current ones? Your bottom line is key in a recession. Since any additions will greatly impact the bottom line, consider maintaining technology that supports customer retention throughout the economic downturn.
- Is your current method of technology and network support working for you? Is it cost-effective? Efficient? If not, it may be time to consider other options. Rebalance technology investments by looking at the comprehensive picture. Don’t focus on shutting them down; focus on making strategic IT investments.
Step 2: Stretch Your IT Dollars
If yours is like most organizations, it needs to make budgeted IT dollars go further. Here are a few ways:
- Save on upgrades: Wait to make any noncritical upgrades until after the recession is over.
- Stretch equipment life cycles: Workstations usually have a three-year life cycle. During a recession it is OK to stretch this to four years, though you may want to consider minor upgrades such as increasing RAM.
- Review software licensing and support agreements: As part of your reevaluation, you should take time to review all of your organization’s software licensing and support agreements to make sure you are not paying for duplicate coverage.
Step 3: Spend Smart
In a recession, organizations often panic and tighten their belts to the point of passing out; and then they are down for the count. So whatever your IT strategy for dealing with an economic downturn, don’t be cheap. Good spending does exist and it comes in the form of IT investments that will add to your organization’s security and productivity. Here are five IT investments you should consider, even during a recession:
- Security investments: Protect your company with firewalls, Microsoft patching, antivirus and spyware protection, and so forth. It’s critical to maintain all services that are protecting your network and keeping your systems up and running because no organization can afford a loss in productivity, especially during a recession.
- Warranties: If you are stretching the lifetime of your hardware, you should not skimp on hardware maintenance. Be sure to extend your warranties.
- Proactive IT service: Without proactive monitoring, problems are much more likely. This is even more important during a recession because calling your IT service provider only when something goes wrong incurs much higher service costs.
- Backup and disaster recovery mechanisms: Ensure your backup and disaster recovery systems are working well. You don’t want operations to stop during a recession should something happen with your front-line business applications.
- Line of business applications: For all businesses, this means continuing to support technologies such as time and billing software that make the operation more efficient. Continued productivity is key in slow economies.
Heinan Landa is the president and founder of Optimal Networks, a comprehensive computer and network support firm providing managed IT services and backup and disaster recovery solutions.