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Best Practice – The Lowest Price May Not Save You Money

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Small businesses face many challenges as they start up, grow, and thrive. Technology and IT services are one such challenge. While small businesses can find the technology and IT services they need, and want, IT costs often poses a barrier to entry. The range of competing solutions, evolving security requirements, the need for cyber insurance, and the lack of specialized advice combine to create additional complexity and stress.

Faced with budget constraints, and uncertain of the choices before them, small businesses often focus on price. More specifically, they look for the lowest-priced technology and services that they believe will meet their needs. Unfortunately, price-first decisions can lead to significantly greater costs over time.

What to Avoid

Free Services
  • Vendors market free services to consumers. These services usually lack features, security, and support necessary for effective business use. Using these features often violates industry or legal standards for protecting information. The result: you face increased risk and liabilities.
Consumer Tech
  • Manufacturers often price laptops and other consumer devices lower than their business model counterparts. And while feature differences may be minimal, business models typically offer longer warranties (1 year versus 30 to 90 days) and include certified repairs and warranty services. Often, these services include, or can be upgraded to include, on-site service on the next business day.
  • The impact is longer repair and service times, resulting in more business disruptions and downtime.
Good Enough
  • Many businesses choose less expensive solutions because they are “good enough.” These solutions may provide anywhere from 60% to 80% of what you need or want.
  • Although this may work in the beginning, businesses will often end up adding another low-cost solution when they need the additional features.
  • You end up with multiple tools with overlapping features and silos of data and information. The result is reduced efficiency and productivity.
Skimping on Security
  • Small businesses feel like a small target for cyber attacks. In reality, small businesses are easier targets because they are generally more vulnerable.
  • And while your business may not be a specific target, you are more likely to get caught by broad-based attacks, such as ransomware.
  • We have blogged quite a bit on the increasing security demands. Stepping back from security reduces costs, but will result in business disruption, financial and legal liability, and higher recovery costs.
  • Most small businesses fail within six months of a successful cyberattack.

Focus on Value

When making technology and IT service decisions, focus on value, not cost. Value includes consideration of factors such as efficiency, enablement, overhead, flexibility, and expandability.

Here are some other value considerations:

  • Understand the Demands on your Business. Regulatory requirements and industry standards will impose features and limitations on the technologies and services you choose. 
  • Evaluate Current and Future Needs. Avoid lower-cost solutions that will need future upgrades or replacements. These changes can cost more than the initial savings and can disrupt, or require, significant changes to workflows and business operations.
  • Consider Scalability. Many cloud services offer subscription options you can upgrade as your requirements evolve. While you should not avoid necessary security features, you can scale other capabilities to your current needs.
  • Focus on Best Fit. Assess how well the technologies and services you are considering will fit together. You lose the savings on lower-cost services if you need to manually move data or add third-party data sync tools.

Call to Action:

If you have not done so recently, now is a great time to step back and assess your IT services and solutions. Our Cloud Advisors are ready to help and assist with any questions or concerns. Contact us or schedule time with one of our Cloud Advisors. 

About the Author

hBill Seybolt bio pictureBill is a Senior Cloud Advisor responsible for helping small and midsize organizations with cloud forward solutions that meet their business needs, priorities, and budgets. Bill works with executives, leaders, and team members to understand workflows, identify strategic goals and tactical requirements, and design solutions and implementation phases. Having helped over 200 organizations successfully adopt cloud solutions, his expertise and working style ensure a comfortable experience effective change management. 

 

Risk and Reward – Protecting the Value of Your Business

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Business ContinuitySeveral weeks ago, in a town not far from our headquarters, a massive fire destroyed a building housing six small businesses.  Our local business journal followed up a few weeks after the disaster with a poll asking business owners how prepared they are for a major disaster.

  • Fewer than 50% of responding business owners feel that they are fully insured, have an emergency plan, and could be up and running in a few days.
  • 39% feel that it could take a month or so, but they could eventually reopen
  • 17% felt they would be out of business or would required state and local aid to survive

While not a scientific sampling, the results are alarming.  Alarming for a few reasons:

  • Even with insurance, it can take days or weeks to get authorization so you can move forward with your emergency plan.  Securing a new location and replacing fixtures, inventory, etc. takes time, as does recovering computer systems and data.
  • More than 50% of businesses closed for 7 days due to a disaster fail within 6 months of reopening.  While many businesses might re-open in a month, the future will be challenging.

Your Risks are Yours

A major fire in a block of retail and service businesses creates specific challenges, as do storms and floods.  Many more businesses, however, experience disasters equal or greater in scope even if they do not have the same level of physical damage. Some examples we have seen.

  • A distributor of customized office supplies lost all electronic business records for the past three years when they where hit by ransomware. The attack corrupted their on-site backup servers as well as their main file and database servers.
  • A news publisher lost all of their physical servers, firewalls, and networking equipment when a sprinkler head failed in their small equipment room.
  • A small plastics manufacturer lost the ability to use their process control systems when embedded Windows workstations were corrupted by a malware attack.

In each of these examples, businesses with customer commitments, production schedules, and deadlines were idled for days. For some, full recovery can take months.  Beyond the hard cost of recovering systems and data, these businesses suffered from soft cost losses.  Missed customer commitments, delayed invoicing and collections, and the time employees spent on the recovery effort all have lasting impacts on your business.

Business Continuity is a not just a good idea, it is a responsibility. 

As business owners, our employees, vendors, and customers count on us.  While people can empathize with the impact of a fire, there is less understanding for businesses that fall victim to cyber crime.  Malware, phishing, ransomware and other attacks are generally preventable when your team is alert and aware of the risks and when you put reasonable identity, data, and system protections in place. And since no protection is perfect, you need to be able to recover quickly enough for your business to continue operating smoothly.

Here is some food for thought:

  • Know Your RTO:  Understand how quickly your business needs to Return to Operational.  Maybe you can work on paper for a few days. Maybe you need to be up and running in a few hours because you are at a standstill until systems are back online. Your RTO goal will guide your decisions on what protection and recovery/continuity services are the right match for your needs and budget.
  • Assess Your Risk: Understand the different disaster scenarios and how they may impact your business.  Think about physical issues, such as loss of power and catastrophic system failures, as well as other disruptions, such as cyber attacks and potential actions by a disgruntled employee.
  • Watch Your Flank: Asses how different types of threats could impact your business.  We are beyond hiding our computers behind firewalls. We still have physical threats, but we also have threats focused on networks, user identities, access control, third party services, and data sources and services. Each threat vector needs a plan for protection, response, and recovery.
  • Factor in Humanity: We used to talk about balancing security with ease of use.  Today, the humanity equation is different as most IT disasters take advantage of human factors like our fundamental desire be helpful when asked. In many ways, your team is your best defense. They need to understand the risks, the methods of manipulation, and the signs that something is not quite “right”.  Your team needs to understand the value of inconveniences like multi-factor authentication and enhanced privacy and access controls — that these protect them as well as the company.

Your next step.

Contact us.  It is time for a serious conversation about protecting the value of your business.  A basic assessment of your business continuity profile will identify risks and gaps. From there, we can discuss improvements and their business value so you can make informed decisions that balance your risks, needs, and budget.  Business Continuity solutions — from disaster prevention through recovery — do not need to bust your budget.   For most business, changes in security settings on existing systems paired with modest, incremental services provide the protection and recover-ability you need.

The QuickBooks Hosting Challenge

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QuickbooksQuickBooks is the leading accounting package for small business. And yet, many businesses cannot run QuickBooks Online, the Software-as-a-Service (SaaS) version. Whether the online versions lack industry-specific features you need, or you have integrated third party tools/add-ons, staying with an on-premise version of QuickBooks remains the best solution for your business.

As you move to the cloud, hosting your QuickBooks Pro, Premier, or Enterprise system makes sense. You keep the version of QuickBooks you need and improve accessibility, reliability, security, and resiliency from system failures and disasters.

In general, we find two levels of common QuickBooks hosting options. Looking at these services more closely, we find these services often fail to meet basic needs without expensive upgrades.  Fortunately, we have a third option designed to deliver the business value you need and want.

Basic

Basic QuickBooks hosting services run between $27 and $30 per user per month, with you purchasing and providing the QuickBooks license key. These services start with 1 GB of storage with fees for added storage that add-up quickly. Adding storage you need for reports, exports, etc., can easily increase the cost to the $75-$90 per user per month range. More importantly, your instance of QuickBooks is running on shared servers and on a shared network. As such, you have greater risk for performance issues, security breaches, and outages. In this type of multi-tenant environment, the actions of other can impact your business. These services offer backup, usually once per day with a fixed retention period of 7, 14, 30, or 90 days, depending on the service.

Better

The better QuickBooks hosting services cost between $49 and $60 per user per month, with you purchasing and providing the QuickBooks license key.  These services also start with 1 GB of storage with fees that add up when you need more space. Typical fees quickly creep up to the $95 to $120 per user per month range.  The main difference is that these services generally run your version of QuickBooks on a dedicated server, but still run on a shared network. While this does reduce the chance of interference from other tenants, this model still has your service running in the same security envelope as other companies. You still have a risk. Like the basic services, you have a once per day backup with a fixed retention period that varies with each service provider.

Best

The best solution for hosting QuickBooks will use your license of QuickBooks in the following environment:

  • Dedicated server
  • Private network
  • A usable amount of storage included (100 GB or more)
  • Flexible backup schedules and retention plans
  • Easy access from desktops, laptops, tablets, and smartphones
  • Access to Excel (MS Office) in the hosted environment

We this type of setup, you are more secure, will have better performance, and greater reliability.

The good news is that we can build you this type of environment at a cost comparable to other services, and we can integrate your QuickBooks environment with your Office 365 or G Suite service.

If you are interested in learning more about QuickBooks hosting options, please contact us for a free Cloud Advisor session.

 

Moving to the Cloud: Cost Savings

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Green_GaugeThis post is the second in a series addressing concerns organizations may have that prevent them from moving the cloud-based solutions.

Will moving to the cloud save money?

The answer is a definite, absolute … maybe!

Whether or not a move to the cloud saves money depends on the in-house services being replaced and the cloud-based services taking their place, as well as the impact the change will have on related IT services and your business.

In our experience, most companies see savings over 3-year and 5-year periods of 30% or more.  Some companies see total cost of ownership (TCO) savings of up to 70%

When looking at 5-year TCO, organizations must make honest projections on IT spending to maintain the status quo and/or upgrading systems.  Beyond projected hardware and software replacements and upgrades, the analysis should include the cost of services and supporting systems (backup, anti-virus, security, etc.).  The analysis should also assess soft costs for administration, support, and estimated down time.

The challenge remains making the comparison equivalent.  For example, moving from a single in-house Exchange server to Google Apps for Business is a move from a system with several single points of failure to a highly redundant and highly available service.  If improving availability is an objective of the move to the cloud, the comparison should include the cost of upgrading the Exchange environment for redundancy.

A final consideration should include any business enablement that comes from the move into the cloud.  Will the cloud service enable the business to operate more efficiently and/or in new, more productive ways?  Improved collaboration, real-time communications, and access to information are all examples of how Google Apps for Business enables businesses over traditional email services.

In straight dollars and cents, not every company will see savings when moving to cloud-based solutions.  With better availability and expanded capabilities, cloud computing solutions can deliver better value, even when the price tag is higher.

Next Post in the Series:  Provider Reliability

Previous Post in the Series:  Moving to the Cloud: Security

 

CFO Research Report: The Business Value of Cloud Computing

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In May 2012, CFO Research conducted a survey among senior finance executives at large U.S. companies to examine their views on the business value of cloud computing, as well as their plans and priorities for adopting cloud-based systems in the years ahead.  This report presents the findings from interviews with 310 financial executives across 15 industries.

Reading this report, you will learn:

  • Key motivators driving the move to cloud computing
  • How CFOs view the business advantages of cloud computing
  • How real experiences with cloud computing compare with expectations
  • Which factors CFOs see as the greatest barriers to cloud adoption
  • The role of employee performance in cloud computing decisions

3 Non-IT Benefits of Google Apps

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When most companies consider moving to cloud computing solutions, in general, and Google Apps, in particular, the decision making process is often IT-centric.  Decision makers focus on the features, cost, and impact of the change.

While not surprising, the decision should really be business-centric.

What value will moving to Google-Apps bring to the business, beyond the direct impact on IT?

In a recent Executive Briefing, we presented answers based on a formal study of more than 100 companies that switched to Google Apps for Business.  Here are three of the highlights:

1) Individual worker productivity gains of 5% to 25%

2) Sales increases of 1% to 4%

3) Travel expenses drop by 5% to 18%

While features, reliability, and cost are all reasons to look at changing technologies, the business benefits should guide the decision process.