With the end of financial year approaching, should we spend up on hardware and software?

The obvious answer to this one is – only if you need it.

If, like many of us, you currently work in a tentative environment and aren't sure if your business is about to grow or shrink, it's difficult to gain a clear perspective. Let me share some thoughts that should help you to decide on the right time to invest in IT systems and software.

Creaking infrastructure has a high cost in business, so it is well worth investing some time to contemplate a strategic approach to upgrades.

If your business employs information workers who sit behind PCs, chances are you are finding it very hard to find quality staff as your business grows.

Productivity is the key driver to invest in systems that enable your workforce to do more, in less time. This takes a whole-system approach to designing the right infrastructure and networks to support the right applications – ensuring your staff work efficiently. Creaking infrastructure can affect productivity so it may be easier to upgrade, than to hire additional staff to achieve 10% uplift in output.

Planning of new systems is complex – if you lack a sound strategy or the right resources to implement a strategy, it is likely that you will either buy the incorrect infrastructure and/or implement it poorly – which fails to get results. I call this "implementing brand new creaking infrastructure", and it's the worst possible outcome, as you invest the cash but fail to get the outcome you were hoping for. Fixing creaking infrastructure once your budget is spent is equally as challenging as justifying the next upgrade after the first one failed to deliver.

If you are investing, now is a great time to do so. With the Australian dollar at near record highs above parity with the US dollar, IT equipment is cheaper than ever. Most IT equipment is traded internationally in US dollars, so, relatively speaking, IT hardware is very cheap at the moment and coincidentally is highly accessible. Unlike the days when PCs cost $5,000 for a basic unit and it was hard to justify an upgrade against a $45K salary, these days a $1,200 expense against a $65K salary is a smart option.

Many suppliers will run end-of-financial-year specials. So, if you have any EOFY budget left and have computers that are more than three to four years old, you will do well to promptly develop a sound plan, then source reliable technical assistance and swiftly order the systems you need.

Remember, PCs and laptops are likely to be run out of distributors' stock towards the end of June, so place your orders early to avoid disappointment and delays.

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

What should we spend our end of financial year IT budget on?

Whether you have money left in your budget, have spent all the money in your budget or have no budget at all, the following will be sage advice for you.

If you’re not sure how to spend your money on IT, postpone spending and start writing a plan!

One of my key focuses in the SME sector is to get people aligning IT plans with business plans, so that the IT budget becomes a strategic-spend, aligned with the growth plans of the business, rather than a single line item on the expenses list.

So, what needs to be in the plan?

Your plan needs to accommodate you core business, so firstly consider which systems will be needed to support operations, finance, sales and marketing.

This will mean addressing the following questions:

• Are there any other parts of your business significant enough to either influence the choice or design of these applications or do they justify their own applications?
• How should the applications be contained?
• Are there cloud solutions to consider or do you need to build servers or buy hosted servers?

Careful analysis of these questions will help you to build a cost-effective budget, with some degree of certainty about how your money should be allocated.

As business has picked up during 2011, we are becoming familiar with the problems that arise when companies fail to plan. I have coined this scenario “Brand New Creaking Infrastructure”, to describe the emerging tendency to spend money on infrastructure as a reaction to an event or problem, disregarding the value of a comprehensive plan and appropriate resources.

Reactionary spending might mean a quick, new solution but fails to help solve the problem in the medium- to long-term, if at all. Of course, this leaves the management team and/or the company owners extremely frustrated, as they have spent the money but are not enjoying the anticipated benefits. This, in turn, drives a bad reputation for IT.

A good plan can radically and quickly change such a perception and ensure you are set up for success in one of the highest expense areas of any business, after payroll and rent.

So, what’s the best way to spend your IT dollar between now and the end of the year, or the first part of your new budget in July? Complete a review or audit using highly strategic advisors, and ensure you have the rest of your 2011/12 budget well protected from the huge range of mistakes that can be made in the information technology world.

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

How to upgrade: Are the answers blowin’ in the wind?

The answer, my friend, is... harder to find than ever.

With the massive shift in future technology, now is the time to invest in smart research, before you consider investing in any technology that locks you in for a three, four or five year commitment.

It is now well recognised that not all solutions are ready to be moved to the cloud, especially here in Australia where bandwidth for data is too expensive and too slow. Until the majority of your staff have access to the National Broadband Network or other economical high-speed data connections, some of your systems may still need to be local.

When considering a shift to the cloud, the big questions are:

• What is ready to move now or in the near future?
• What has shifted or is shifting that simplifies our environment without complicating our work processes?
• Will it demand re-training of our staff in basic business functions or can it be business as usual?
• Whose systems are stable enough for us to adopt – given the massive “oops!” we observed recently with Amazon dropping the ball for three days?
• Is there any strategic benefit to moving now?
• Is there a cost benefit in there anywhere?
• Will our broadband support it without a cost blow out?

A warning to smaller businesses planning to grow; if the barrier to entry is low, such as small licensing costs for a single user or few users, consider what will happen to pricing as your business grows. We are seeing some cases where the low cost of entry is later offset by very high costs as the business requires five or more licenses. This can be the case with cloud CRM or ERP systems, so I recommend you pause and consider the shape of your business down-the-track, as well as your immediate requirements.

A huge advantage of using cloud solutions is that it can remove the upfront cost of infrastructure. This is appealing at the point where your organisation is growing and cash is tight, and it also enables your organisation to be mobile and nimble. The flipside is that you may need the infrastructure of servers anyway, which means you wind up paying for: the parts, the expensive cloud application, plus the infrastructure and associated management of it.

So are there any cloud solutions that are worth a look? Yes, there certainly are...

The more common the need for a program, the more likely there is to be a scalable, cost-effective online solution. Email and standard office applications fall into this category. Soon Microsoft will have its Office 365 offering live; it is on beta testing now and early reports are positive. Early adopters of the Microsoft hosted email and SharePoint tools through Telstra’s T-Suite seem to be in agreement that the systems work well and have a good price point and billing method with reasonable performance – all without requiring staff to be re-trained.

The key for your business is to ensure the research is done and well-budgeted plans are developed for all of your systems before the investment is made on the wrong solution for a component. Now, more than ever, is not the time to be blowin’ your budget in the winds of fate.

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

Should I have to yell at my IT person to get stuff done?

Ouch! By the time you're yelling you know it's a lost cause... don't you?

I have learnt this with my kids many times over and yet, just like you, at times I still find myself yelling for sheer lack of alternative strategies. While we don't have the means or the inclination to entirely outsource the care of our children, school does come in handy to reduce the time spent yelling!

At times, IT problems can illicit similar feelings of frustration, and similarly I am confident that raising my voice at IT people is about as effective in solving the problem as growling at my children.

If you're yelling at your IT person it's possibly for one of two reasons, one is that your expectations of what one person can achieve across a range of technologies and disciplines is unrealistic in a huge and complex field, or it is probably because you're having the wrong conversations in the first place. Are you currently stuck delegating tasks despite not being an IT person yourself? If this sounds familiar the chances are that you lack the right strategy to solve the problems effectively – what you have is a breadth and depth problem.

Many IT people prove themselves to be great technicians who can clean up a virus or replace toner in a printer to keep things running smoothly, however it is highly likely that their focus does not concern the long-term viability of your IT systems and providing a long-term IT strategy that successfully boosts productivity, maintains security and makes use of newer technologies. Without this investment, your IT support is growing less aligned to your business plan, which means you are spending money on IT but failing to witness the benefit of this expenditure.

Alternatively, if your IT person's skills are geared towards the strategic end of the scale, you may have great plans but find yourself struggling to develop the budget to execute these plans in a cost-effective manner. This scenario sees you yelling at a very knowledgeable strategist who has no desire to roll up their sleeves and get on with the job of delivery.

Furthermore, more experienced IT professionals may not even have the desire to keep up with the latest hands-on skills or technologies in the rapidly evolving domain that is information technology.

If your people lack practical skills, you could invest in training them to do a single upgrade job; but it is highly likely that they would never get to use the skills or experience again without moving to another company. Again, not a strong return on investment for your business.

So, yelling clearly will not create harmony or progress, and therefore I suggest you seek alternative ways to strike the right balance between reactive and preventative solutions for your IT environment.

I recommend employing a system of logging requests that allows a team of people to prioritise the jobs that need doing in a structured way, but that also allows service levels to be assigned to problems. This process will ensure that the higher the impact of a problem the sooner it is tackled by the experts. You then need access to a team with the breadth and depth required to resolve the varied problems you face – mountains and molehills!

Large organisations have made use of help desk software and project management software for years to ensure delivery is not a yelling match.

Somehow, this is not always the case in smaller organisations, but that need not be the case, as there are now scalable tools for smart managers in the smallest of businesses.

If IT is a core part of your business but the process of researching and implementing the appropriate management tools is a daunting task, perhaps it is time to consider outsourcing it to a team of people with a broad set of skills and a good set of management tools.

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