Never confuse investment with dumping a lot of money on something. The strict definition of investment is that of purchasing items which are in turn are used to create future wealth. Even a comic book can be an investment if you wait long enough. So when you’re investing in technology to operate a business, you’re spending money on items that make it easier to do business. A business can invest in advertising, technology, and other items that will offer significant return, and even savings down the road. However, as with all investments, you want your money to work to its full potential.
Your technology spend needs a reality check. As a business becomes more successful, there’s always the temptation to leave the pinch-penny startup mindset behind, and this is exactly what should not happen. Growth is not success, and flinging money around to have the latest and greatest can bite when you need the money later, sometimes fatally. While underinvesting in technology is not a good idea, but you can always upgrade. You cannot un-buy a telepresence suite that costs more than a new Mercedes Benz or eBay a $4,000 HD camera and expect to get your money back. After the initial cost of the purchases comes the upkeep, training, and other expenses. Back before the bursting of the dotcom bubble and the housing bubble, maybe you could throw cash around like it was there to burn, but in the post-Recession economy, savvy business owners need to make sure every dollar is unsinged.
Meetings and Travel
One of the biggest hits of the post-Recession economy was to travel budgets. The trade shows, the seminars, conferences, and retreats took a big hit right after the 2008 bank crisis as lending to businesses tightened up. This in turn harmed businesses that were not heavily liquid, and smaller businesses ended up financing needed expenditures on credit cards and budget cuts that went to the bone. While business travel increased among the Fortune 500, the larger portion of businesses needed to find new ways to save money, yet still make their meetings, speak with off-site staff, and manage supply chains. If every cloud has a silver lining, then the outcome of the Recession was a technological shift toward the idea that less could be more.
The demand for less expensive broadband, the rise of the smartphone, and the need for larger data solutions than most companies could afford spurred the evolution of the cloud. From buzzword to a utility for billions of users, cloud based applications vary from the mundane Netflix queue, to billions of e-commerce sites, to communications and software suites in use every day. Even video conferencing technology evolved into apps like Bluejeans, with companies able to have high quality video meetings without a huge investment in hardware and subsequent upkeep. Lately, according to IDC, companies like Polycom are seeing hardware sales drop as companies favor working meetings held on the Blue Jeans Network over trying to coordinate disparate systems and devices in order to reach the needed personnel.
Moving to the cloud shows companies how to trim their budget, streamline their IT expenditure, and get their meeting culture and travel budget in hand. Reasons for moving to the cloud vary, but according to Right Scale, the tangible benefits are what make cloud a keeper. Over 60 percent cited greater scalability, but cost savings, higher performance, and IT staff efficiency were also top reasons for sticking with cloud-based services and applications. Moving meetings into the cloud addresses every one of these benefits head on. When it comes to meetings, a recent Verizon study cites that staff overwhelmingly values them in excess of ten to one. Meetings have a factor in job satisfaction, too, by making employees feel productive, involved, and able to contribute in a positive way.
Return on Investment
Return on investment is the sine qua non criteria for every business’ expenditures, and every expenditure should be considered in the light of investment. How does it benefit the company? Of what use will it be next year, in five years, or in ten? So making your cloud investment strategy now could pay great returns when you sit down next year to figure out how you did this year. By streamlining your operations without cutting quality or service, you might see an impact in areas that were not giving good returns and find ways to streamline them as well. Keep in mind that getting out of the cash crunch takes time, keeping a close eye on your APR, and self control. It’s easy when you’re flush with cash to sell yourself on a big expenditure that will burnish your image, but completely discombobulate your bank balance. Do your homework before you spend!