Why is IT for growth businesses like a hermit crab's shell?

This week I had the pleasure of attending a networking session at a design company called Hermit Crab. I was somewhat surprised to learn that office space requirements and IT solutions have a lot in common with hermit crabs.

Let me explain...

As we all know, hermit crabs live in shells and, as they grow, discard the shell they're in and find a larger, more appropriate shell to move into. Businesses do the same with offices and I am, as a business, now in my fourth shell.

Combo started in a spare bedroom of my house. As I hired staff and the business grew, we were forced to relocate to the lounge room, which was significantly larger. Before we knew it, the house was too small and we were forced to relocate the office to a larger facility. After three years of ongoing growth, we had to move yet again – this time to a full commercial office space. So far this has been okay, but I can see a time when more space will be required.

So, over time, our office space requirements have expanded significantly. Likewise, we've had to scale up our computer systems and phone systems. First, we had one small, cheap PC. Then we had two. Then we added a cheap server, and then a larger server, and then two servers. Today we have several – some physical and some virtual. Each server has a purpose and is customised to the solution it provides, by experts who understand the demands placed upon it.

Had we started with the systems we need today eight years ago, we would have failed as a business – because the cost of the equipment, licensing and maintenance of those systems could not have been suitably funded by our business as a start up. So, the hermit crab approach has been sensible and worked well.

Today, we are becoming more modular with our solutions, thanks to the brilliance of virtualisation. This lets us add virtual servers as and when we need them, and expand hardware in a more modular fashion.

Smaller businesses still need to use the hermit crab approach until they reach a level where they can access the first module of a modular system. Alternatively, they should consider a cloud-based solution because they are elastic in their nature and don't have constraints that one can grow out of.

Many people are adopting cloud-based solutions today, for this very reason. Scaling is no longer a concern, and physical equipment does not need to be replaced as growth occurs. This is going to change the nature of many IT business transactions over the next few years, and will have a deep impact on the IT server marketplace.

So what does this mean for your business? If you are in any doubt about how your business should make use of technology as you expand, it's time to review your business plan and align your IT plans to the needs of your business. If you need help with this, seek a trusted advisor who understands the impediments IT can cause in a fast-growth business, and can work with you to design the right solutions.

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David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

Our internal IT guy needs help. Where do we turn?

This is a common problem and, interestingly, by the time anyone else in the company notices that the poor, isolated IT guy needs help, it's usually long overdue. The IT guy may know that he's not keeping up with demands and requirements, or he may be blind to his own shortcomings. Either way, he is probably very stressed and making costly mistakes.

There is a huge array of responsibility in IT systems for any business with multiple computers. There is the obvious stuff like, 'fix them when they break', but there is less obvious stuff that needs to be addressed as a company grows, including:

• Capacity planning
• Security
• Disaster recovery planning
• Application selection
• Web strategy
• Project management
• Relocations

As any company grows, the technology required to keep it running changes both in scale and complexity. Different knowledge is needed to support a company with five computers as opposed to a company with 12 computers. And this keeps changing as systems grow and requirements increase.

Once your business and systems grow to need one server, it is only a matter of time and further growth until you need more servers and the complexity of your systems grows even more. At this point, you'll need regular help and support to keep the systems running. If you go down the path of hiring someone to support this environment, it may work cost-effectively for you. However, any individual has limitations and blind spots when it comes to technology and supporting all aspects of it for a business.

It is very important that non-technical people running a business seek advice from technical experts in their field. The real problem is this – how do you know that the people you are talking to as technical experts are really experts in your scale of business? IT is definitely not a one solution fits all type affair.

In fact, for one business in one industry, the required technology can change as the business grows. Now, with options in the cloud and on the ground, it is important to know:
1. How solutions fit now and give a good return on investment (ROI); and
2. How they will work for you in a couple of years time when your company has grown.
With 10 staff, you may get a great ROI on hosted email, but at 20 it may make sense to run your own mail server until you get to 60 staff, at which point it may be better to go to a larger-scale hosted solution.

I mentioned before that your IT guy may be isolated in your business, and this is something that often surprises business owners who are not technical. They hire someone to solve the IT issues, and he knows more about IT than anyone in the business, so he arrives and is instantly the hero, the savior and the expert. He is hired because he knows how to work with what is in place, or what is needed next, possibly because he's had the right experience somewhere else.

But, soon enough, he will need ongoing training and exposure to the latest technology so that he can bring that back into your business. Leaving him at his desk answering emails, phone calls and screams for help is only a short-term solution to your IT problems. Bringing in the relevant experts to run projects and assist your IT guy needs to be part of your ongoing solution to IT management within a progressive business.

It doesn't matter what size your business is – you need to work with the right technology partners and advisors to get current advice that is relevant to you. Some guy who has a sophisticated corporate IT job, and plays with PCs on the weekend, probably has no idea what will work best in your business. Finding trusted advisors who have their finger on the pulse of the IT industry is key to the future success of your business.

Click here to read more IT Systems expert advice.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

Do we need a structured IT policy for our company?

This is actually an HR question, not a systems question, but it somehow always falls to the IT department to answer because they're the experts in regards to the risks associated with this area of the business.

Essentially, it should be up to the IT department to work with the HR department to ensure the right policies are in place for your IT systems.

There are a number of risks inherent to your business IT systems that locking down computers can limit – but not really remove.

Some of these risks are:

• Loss of data through deletion and corruption.
• Data theft.
• Leaking of information protected by the Privacy Act, confidentiality requirements or expectations.
  
• Exposing staff to indecent media (text, sound or graphics).
  
• Inappropriate use of company equipment and resources including:
  
  • Downloading of illegal or inappropriate material
  • Downloading of bulk materials (known as leaching)
  • Distribution of spam
  • Use of stolen or pirated software
  • Distribution of stolen or pirated software
  • Hosting of inappropriate material for download
  • Forwarding of illegal actions (hackers like to hide behind other identities).
• Activating viruses on inappropriate websites by initiation of web scripts.

Unfortunately, this list goes on and on. Many of these risks can be mitigated with good use of security systems within your organisation, but not all of them can be prevented or detected without significant expense. With a strong IT policy in place, staff can be encouraged to not deliberately embark on these activities, and – if caught – can be strongly disciplined or, if necessary, removed from the company.

IT policy can also be used to set expectations about who owns the data stored on the systems, and who owns any IP created or stored on the systems.

I've seen many examples of IT policy being required by a range of companies. One such example was a case where staff were downloading videos using torrent software, and ran up a bill for many thousands of dollars before being found out.

I've also seen employees downloading and running pirated software to "get a job done" when the required software was not made available to them. The employees were thinking "get the job done, don't spend money", but management were oblivious to the risks this exposed the company to. Good systems monitoring may have prevented both issues, but clear policy can deter staff from embarking on the wrong path.

You may not need a policy in a small company if you think you know your staff well. However, think about it like this – an IT policy:

• Is easy to introduce;
• Turns management's expectations into clear communication (never a bad thing), and;
• Can save you if there is ever an unexpected breach.

If you work with a good IT advisor, they should have templated policy documents. I recommend that as a good place to start.

Click here to read more IT Systems expert advice.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

Is it time to update our systems?

In my experience, people in business know when they need new IT systems but lack the technical nous to explain why, and the IT / business skills to justify the additional expense.

So, when it feels bad they spend a little bit of money to try and speed up the system to make the bad feeling go away. When this fails, they feel even worse about the money wasted and stick their head in the sand hoping they don't have to spend more soon.

So, it's the new financial year, and like every other year, you've probably failed to budget for IT and you know your systems are failing your business. You also know that you can't blame anybody for this situation. You made a small profit last year, but you have to hang onto it to get through the tough times we all know lie ahead before the financial storm is over. You can even remember a time before the financial storm, when IT was hard to justify spending money on, and now you are really suffering because of the poor planning and decisions you made back then.

There are a lot of reasons why old computers slow down. Of course, there is some stuff that can be done to make them limp a bit quicker, but we all know the real solution is to give them the bullet and move to new equipment – set up and fine-tuned to work better than the old stuff.

So how do you move from here to where you need to be?

First of all, stop spending money on your current systems. You're probably throwing away good money. Assess how much you are spending on the systems you have, and on keeping them running. Here is the hard part – I want you to include the cost of downtime by multiplying the number of staff you have by the number of hours of down time by the average salary or your hourly charge rate if you know it. Also include the cost of services you are using to remedy the IT problems.

If your computers are not crashing, but are just slow, try to figure out how many hours a week are being wasted by how many people. And, if there are things you just can't do, figure out what it would be worth to your business if you could do them.

This will help you establish a budget. If you are spending nothing and there is nothing to save, you need to reach deeper to find the budget.

Think about it like this though – how many staff are you likely to upset and lose if you do not update your systems? How many prospective clients will you miss out on? How many existing ones will you lose? Can you track billable hours of your staff better to recoup more fees or can you get more stock turns through better inventory management? Keep thinking about why you use computers, and where they can return on your investment.

Specifically, ask yourself:

• What are the must-have improvements you need?
• What will generate the most profitable results?
• What will improve efficiency the most or reduce lag times the most?
• Can you account for more services or stock?
• Can you improve margins or improve services?
  What will you need to achieve this?

Start with the software you need to achieve the outcome, then move onto the hardware to support it, and finally find a services team that will make it all work for long enough to give you the return on investment.

If you need help with any part of this journey, find a trusted advisor who can help you understand your business from an IT perspective and develop the right plan to move forward so you can stop wasting money on the wrong solutions or resources, and start investing in a profitable future.

And, remember, now's the time to do it – take advantage of the ever so low interest rates, lock in a lease and invest in new systems. There is a good chance it will put you ahead of your competition when the financial climate improves.

Click here to read more IT Systems expert advice.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.

We are not sure if IT is creating value in our business. How do we know?

In any business, there are essentially three perceptions of IT expenditure:
1. A necessary evil that we spend money on when we have to.
2. A business tool that we spend money on to stay in the game.
3. A tool that provides competitive advantage that we invest heavily in.

The category you're in is a big part of deciding whether IT is creating value. Often, businesses that do not perceive value in IT are either:

• Not investing enough to get any value; or
• Fundamentally lack a plan for the investment they're making, so spend inefficiently and do and re-do work on IT, without deriving the available benefit.

So, which category are you in?

If you don't need IT in your business, then please excuse yourself at this point. Clearly this article does not apply to you, as you either have no staff or have outsourced all your financial management, BAS statement generation, payroll, stock management, time management, communications, and so on. Well done, but move along.

If IT is a necessary evil for your business, and if you're not getting value from it, what does it do for you, and why are you investing in it at all? What other areas of your business could it manage for you, and how could you use it better to help your business grow? Have you mastered eMarketing, social media, the web? Could you manage your resources of stock or time better? Could you track clients, or complaints, or project delivery better?

I've seen a company that assembles machines used for commercial cleaning employ multiple staff in an assembly process. They don't use inventory management on a computer, but they tell me they really don't have much need for fancy IT systems. Unfortunately, they couldn't see that keeping track of their parts electronically, and scanning new deliveries into location bins with the number of items, would speed up the tracking of parts available for assembling units – and improve the just-in-time delivery of additional components, before stock was exhausted. Now, if carrying $2 million in parts is your way of ensuring your labour force is never idle, don't sweat the IT system. But, if you want to cut the investment in stock by 50% to 75%, you will get a very snappy return on your investment in software and a barcode reader.

You need to look closely at your business, and determine what value IT delivers to your business. If you turned off your computers, what would go wrong and how much would it cost you? Why? What are the greatest costs in your business or the greatest losses?

In my business, one of the greatest sources of loss occurs when my technicians fail to account for an hour of work done. When they don't account for it, the client gets a gift and we lose the opportunity to bill for the effort – while we still have to pay the salary. So, it's in our best interests to invest and make it easy for our technicians to account for their time. For a construction company, the investment needs to be able to manage contractors and employees, and communicate quickly and effectively when changes are required.

If you don't know where the value of IT is for your business, and you fail to invest, chances are your competitors will be able to do things at a better rate, or with a better outcome than you can. Today, as every business globally becomes more competitive, this just isn't viable. As technology is more pervasive than ever before and more easily accessed from mobile tools, the gap between those who use technology to get ahead and those who don't, is increasing.

If you're not sure about the value IT is creating for your business, find a trusted advisor who really sees where you could benefit and get them to work with you to develop a cost benefit analysis that helps you justify the expense. Then, ensure the IT strategy is in-line with your business plans, and build a budget to meet the needs of your business.

Most importantly:

• Avoid spending on IT until you know what the return will be, and why you need to spend.
• BUT, don't make the mistake of avoiding spending on IT. It may leave you behind your competitors – and cost you your business.

Click here to read more IT Systems expert advice.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.