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Information Technology for Startups: Costs and Budgeting

In 2019, industry experts believed that the total global IT spending would reach almost $4 trillion. As consumers and businesses become more dependent on technology, it’s not hard to realize why the IT industry is continuously booming. However, as their services increase in sophistication, their costs may also rise.

It’s not an option for businesses to forego IT, though. Businesses put themselves at risk for cybersecurity threats without it. Just look at what happened to Equifax in 2017. That cyberattack was one of the largest data breaches in history. It is terrifying to think that it happened to such a large company, which certainly employs a competent IT team. It means cyberattacks can easily happen to small businesses.

But when startup owners are urged to invest in reliable IT solutions, they tend to stall in making decisions. IT isn’t a cheap service, after all. Many new entrepreneurs aren’t very knowledgeable about it as well. But IT doesn’t have to feel unapproachable to tech dummies. And it shouldn’t break the bank either.

Below are the ways businesses can make their IT services cost-efficient:

1. Create a Realistic IT Budget

An entrepreneur who’s clueless about IT services may not know how to budget for it. Thankfully, IT budgeting isn’t rocket science. Generally speaking, it’s divided across two main categories: ongoing expenses and project expenses. The subcategories under ongoing expenses include staff and compensation, hardware, and software. Under project expenses are whatever projects you have underway, particularly those that involve technology.

Bigger companies may allocate the elements of their IT budget to the various departments’ IT supports, then charge their expenses from those departments. But that method adds complexity to an IT budget and thus isn’t suitable for startups.

If you don’t have a formal or informal IT strategy, budgeting is a good way to start making one. Identify the areas where you can use better technology, then determine what technology can benefit those areas. For example, if your file storage has low security, perhaps cloud-based storage will make it more secure. Cloud computing can also solve other tech issues, like shortcomings in your database and network. Just follow that format when planning your IT budget, and you’d neither overspend nor underspend.

2. Streamline Processes

If people can put and access every information they need on a smartphone, businesses can do the same. They don’t need a separate device for each different function. For example, if you need a POS system for credit card payments, you don’t have to buy the old-school cash register.

Instead, use a terminal and input everything in secure, cloud-based software. You can also set up an online store with a secure online payment method. That way, you’re collecting information from a single device, streamlining your processes. It’ll save you more time and money.

3. Use a Voice over Internet Protocol (VoIP) Phone

VOIP

Using a VoIP phone is another way to streamline your processes. A VoIP phone is a communication device that relies on the internet instead of traditional phone lines. It allows you to contact your colleagues and customers remotely anytime.

In addition, VoIP has rich features, including call forwarding, blocking, caller ID, voicemail, automatic call distribution, and more. Despite this, the cost of using VoIP is incredibly cheap. Since it relies on the internet, it doesn’t charge long-distance phone calls higher than regular calls. In fact, it makes all calls virtually free. You pay your usual internet bill.

3. Automate Costly Manual Tasks

In manufacturing plants, many human tasks have been replaced by machines. Your business can benefit from automating some human tasks, too. It will save you time and boost your productivity.

People say technology is robbing people of jobs, but in reality, it’s creating better jobs. Instead of administrative tasks, job hopefuls can now focus on strategic and analytic work. Business owners, on the other hand, save money on wages that machines can make free.

Basic accounting, human resources, copyediting, and proofreading tasks are examples of tasks you can automate. It will allow the people who used to work on those to spend their time on tasks that actually help your business reach its goals.

4. Invest in Cybersecurity

To avoid what happened to Equifax, invest in robust cybersecurity solutions. IT service providers also offer them. Without cybersecurity, you make an appealing target to hackers. And if your data is breached, it’ll be more expensive to retrieve them if you can even get them back in the first place.

It costs money to reduce your costs in the long run, but that’s money well-spent compared to the expense of salvaging lost data. So implement these IT strategies while your business is still young. It will help trim down your future IT costs.

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