Technology is a beautiful thing that enables businesses to improve processes, be more efficient, and cut costs. Or that’s the theory, anyway. The truth is that many companies – much like consumers – are overspending on tech, and unless you are keeping tabs on your technology expenses, there is a chance you will be eating into your profits. The big question for today is – why? We’re going to take a look at some of the ways many businesses are spending too much on technology, and suggest some alternatives.
When you are a startup, you want to look the part as much as anything else. And that might involve spending big on all the latest and brightest new technology. You want the best for your company, of course, and to kick things off looking like you mean business and an office full of high spec Macs is a great way to show off your worth. But that’s just the problem – it is purely showing off. When you are just starting out, you should focus on buying the essentials for your business and investing the money where it counts – towards finding customers, for example. Customers buy things and contribute to your profits – the latest Apple Macs don’t.
Cloud platforms are almost always marketed as being a cheaper option than other alternatives. However, it isn’t always the case – particularly when you are talking about the long-term use of a service over 3-5 years. Take servers, for example. When you buy your own server hardware and look into the cost of colocation third party services, it can often turn out cheaper than, say, using a cloud server for a few years. If you can afford the upfront cost of hardware, it might be worth looking into if you are assured that it will be suitable for your business for the long-term.
Part of the problem everyone is experiencing with technology at the moment is that it is moving too quickly. It seems that every week there is a new trend or ‘must-have’ product or service. And it causes problems for businesses in a couple of important ways. First of all, you will find you spend lots of time looking for the latest developments in tech, and ensuring your company isn’t falling behind. And there is also the problem of redundancy. Most technology ages incredibly quickly and if you spend a lot on new devices, the chances are they will be old and outdated within a couple of years.
Finally, many IT teams and modern businesses are investing in technology and services that they just don’t use. It happens for a few different reasons, including risk aversion and business owners trying out new things – and hoping they don’t fall behind the competition. Many companies are currently spending on systems that are way more powerful than they actually need, and it all adds up to a significant amount of overspending.
Is your business overspending on tech? Let us know your thoughts in the comments!