Monday, December 08, 2008

Michigan 8 Year Recession and Technology

So we got some great news yesterday in the Free Press that Michigan is the only state in the Union mired in an 8 year recession. Others are starting to see some of the affects that we've come to know here. Frankly if I would have seen this 5 years ago I might not have started my business out of fear.

But good entrepeneurs have to face facts that sometimes we will see downturns and we have to be prepared for these just as we're prepared for anything else. (Disaster recovery anyone?)

So what can you do to tighten those belts and look ahead? Speaking from the technology sector we have to look for things that will save us money in our business and use technology to do that, not just spend to get the latest toys, black Friday aside. (Man I love my new Blu-Ray player!)

Also we might have to face that facts that saving money might mean moving job responsibilities around so that one of our own doesn't do so much in the way of technology but allows someone else to handle it. Outsourcing is a fact of life and right now just makes sense for most business. That's why so many folks are looking at having their vital apps hosted somewhere and not deal with building a network infrastructure themselves.

If you could save your Office Manager (who 9 times out of ten is the IT contact) 5 hours a week to focus on business development and getting new business and perhaps you're paying that person a total of $30/hr with salary and benefits then at the end of the month you're paying $600 just for IT in house and that doesn't include projects or hiring an expert.

For $600 a month a business with 10 PC's and a server could definitely get a high level of service from an IT house with regular maintenance and 24x7 monitoring included. Technology is taken care of and now your Office Manager can help grow revenue rather than waste it.

The same is true of projects. Small Business Server 2008 is a tremendous product however I'm sure we'll see less call for it this year than when Small Business Server 2003 came out. Why? Benefits. The price per payback just might not be there if you simply use your existing hardware.

However what about the 3-4 server shop with 100 desktops? They might definitely want to consider the new Essential Business Server 2008 and on top of that virtualize it with Hyper-V which we have found to be rock solid. That will be our default configuration going forward. Why? It's all about the payback. Now you can have one bigger server running 3 servers inside with lower energy and cooling costs that give a direct ROI.

Another cost that kills business monthly is telecommunications. Recently I did an audit for a company that has a T1 direct to another location and a new lease on an old key telephone system. The cost of just those 2 things? How about $1100/month. What if you could wipe that out immediately, install a cable modem and a point to point VPN installation (security aside for some industries) and now have the same functionality for $100/month in telecommunication costs with a new phone system that might cost you $400/month. How long is the ROI on that? 9-12 months perhaps? And you're getting better technology.

We say it time and again but technology should be about improving the business not slowing it down or just looked at as an expense. If someone sees technology as a necessary evil those are the folks that we just walk away from during our assessments because they won't get it and see the opportunities to grow in an 8 year recession.