Legacy IT is a huge cost drain, making your processes less efficient and eating into profit margins. Worse still, your old systems are also preventing you from using technology to deliver a competitive advantage.
Vanson Bourne research published this week by Computer Weekly suggests that 90% of IT decision makers believe legacy systems are making their businesses less efficient. But when technology is often used as an excuse to mask other organisational failings, like poor management processes, how much attention do these statistics actually warrant?
General IT costs
It is generally accepted by IT industry analysts that businesses spend up to 80% of their budgets doing nothing more than ‘keeping the lights on’. In other words: ensuring that existing technology continues to run. Licensing and maintenance costs, utility bills and staff wages all contribute to the total cost of ownership, a value which decreases in line with IT inefficiency.
With this in mind, it’s important to understand how using modern computing models like hosted servers and on-demand Cloud software can free up IT budget to be spent on new strategic developments. Immediate savings can be realised by a reduction in the amount of support required as software and supporting systems become the responsibility of the service provider for instance.
Telecoms and even electricity also play a part in determining how efficient your business is. The Institute of Directors reports that nearly half of their members are dissatisfied with current broadband speeds and reliability for instance. Where employees have to wait seconds or minutes to access online resources, your business is losing money, and over the course of a year, that time quickly adds up.
Investing in faster, more reliable connectivity reduces time wasted ‘waiting’, so that your employees can move on to the next task, delivering an immediate productivity boost.
What’s more, as you struggle to manage electricity bills and ethical business practices, your carbon footprint is greatly enlarged by older hardware which is typically less energy efficient. Replacing older systems with newer versions, or even outsourcing servers and other machines to a hosted datacentre will boost technology performance and help to free up finance for strategic reinvestment. Gartner estimate that energy costs account for around 12% of datacentre spend, offering plenty of potential for new savings.
Ageing desktop PCs and servers are also a constant source of frustration for employees who are unable to operate at their own peak performance because they are waiting for IT to catch up. The snappily-titled Workplace user frustration with computers: an exploratory investigation of the causes and severity academic study found that users ‘reported wasting on average, 42-43% of their time on the computer due to frustrating experiences.’
In effect a deskbound user could be wasting almost half their working day on inefficient IT.
Investing in modern technologies will help deliver an immediate performance boost and help employees get more done.
Big changes need small changes
For the time-constrained SME executive, it may seem like the only solution is to throw more money at IT and hope it is enough to buy updated systems. But this approach simply moves the problem along for a year or two until technology begins to age again.
Hosted servers, Cloud applications and superfast broadband all offer a way to cut running costs without compromising the level of support you receive. When this is hosted in an enterprise-class datacenter, managed by technical experts, you also benefit from improved availability and a reduction in your own workload. Those time and money savings can then be invested in pushing your company forward with modern technologies.
- Old IT systems are the cause of most of your IT spend.
- Broadband and electricity are both important indicators of IT efficiency.
- Legacy IT could see your employees wasting almost half their working day.