There are always more numbers to crunch. In IT, particularly, you always have to weigh the costs of upgrades against expected returns. We always want new tech to pay for itself several times over, but that won’t happen unless upgrades are made with excellent direction. Usually, the biggest problem with new tech is that it is encumbered by old systems. All too often, upgrade plans overlook cabling infrastructure, and that gets expensive.
Old Systems Kill Numbers
Let’s cut right to the chase. A survey run by Samange (an HR resource company) found that the average worker wastes 520 hours a year fighting with old or outdated technology. At median wages, that comes out to more than $13,000 a year per employee. Even a small business can easily lose more than a $100,000 a year on wasted labor when systems age out of peak performance.
Keep in mind that this just refers to lost labor. Old systems can hit you with information bottlenecks, security risks and all manner of other money sinks. When you put it in raw numbers, you can see why IT providers represent such a strong industry.
What does this have to do with cables? Cabling infrastructure is an often overlooked source of losses. Dated infrastructure limits the rest of technology in an enterprise, and until it is properly managed, you have no hope of overcoming the huge money sinks you just discovered.
The Cost of Finding Problems
Unless you have an impressive IT crew already, your best bet to finding and resolving tech-related revenue drains is to have an IT infrastructure audit. These can range wildly in scope. We might be discussing cables today, but there’s no reason an infrastructure audit has to be so limited. You don’t want to pay for an audit that won’t find the best possible ROIs.
Justifying the cost of the audit is the hard part. Obviously, the price tag will depend on how large your company is and how much ground the audit is covering. Small businesses might get away with spending a few hundred dollars. Major enterprise audits can exceed $30,000. That’s a frightening number, but remember that you can easily get that money back if it actually helps your employees improve their productivity. Reducing tech-related downtime by 10 percent for just three employees will cover that $30,000 in a single year. There’s room for much larger returns.
Understanding the Return on Investment
What’s particularly frustrating about facing the cost of an IT audit is realizing that you have spend even more money to actually implement recommended changes. It can be a difficult pill to swallow, but one company’s success story might help with perspective.
Buffer is a technology company with a specific niche. They manage social media for other businesses. That’s it. Despite the narrow focus, they’ve found great success, and they currently run an 80-person team. That’s not exactly a record size for employment, but based on the numbers we’ve already seen, that team is losing over a million dollars a year in productivity.
Buffer recognized the problem and audited their infrastructure. Between the audit and the changes they implemented, they spent just shy of $20,000. By their reporting, they are now saving $132,000 a year. They didn’t succeed in bringing lost productivity to zero, but they didn’t have to. They achieved a 600-percent ROI by finding specific problems in their infrastructure and removing them.
Clearly, this one story can’t reflect every company, but it paints a useful picture. An IT audit can help you find where you are losing money every day, and something as basic as updating your cables can be the key to massive returns.
To learn more about technology inventory management and the web-based TEM tool, Clearview, make sure to contact us for a discovery call!
About the Author: Nancy Peckham
Nancy began her career in telecommunications in 1983 as an account executive with Republic Telecom, a regional long distance carrier. She was named district sales manager for the Wisconsin region in 1987 when Republic Telecom was acquired by Mid American Communications. She recognized a need for independent, objective telecommunications consulting which led her founding Valicom. Since its launch in 1991, Valicom has been a leader in providing telecom expense management solutions and serves enterprise and mid-market clients in a variety of industries and verticals across the U.S. Nancy earned a bachelor’s degree in psychology from the University of Wisconsin-Madison, founded and served as president of the Telecommunications Professionals of Wisconsin (TPW) from 1989-1992, and was executive vice president on the board of directors of the Society of Telecommunications Consultants (STC). Nancy is also a founding member and executive council chair of the Independent Telecommunications Expense Management Association (i-TEM).