Reducing IT costs

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It’s impossible to run a company these days without an investment in technology, which can take your operations to another level. But how do you do it economically and without wasting extra cash on needless tech services or products?

That’s a question many small businesses are asking, in a grim environment that’s wreaked havoc on firms’ financial stability. Done correctly, cutting your current tech spending may leave your company leaner, faster and bigger than before.

Try Web-based software for specific tech tasks. In industry parlance, it’s called virtualization, cloud computing, software-as-a-service or software-on-demand. For many companies, it’s cheaper to pay a monthly fee for a web-based service, such as data back-up or antivirus protection, than to make an upfront investment in the technology. Innovations International Inc., a workplace consulting firm in Salt Lake City and San Francisco, began using so many online services that in April 2008, the 25-year-old firm went completely virtual. The company has reduced its operating expenses by 20% to 30% as it now uses RingCentral.com for phone, Egnyte.com for database servers, Skype for internal and international calls and Google Apps for email. The company no longer pays $5,000 to $6,000 per month on office space, as its five employees now work at home. Many of the online services were free or cost $25 to $90 a month, says Danny Guillory, its chief executive.

Further, justifying subscription payments is easier compared to upfront investments as monthly payments come from operating expenses while huge upfront costs are in the form of capital investments.

Source: Wall Street Journal: Small Business