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Exploring what’s next in tech – Insights, information, and ideas for today’s IT leaders

The essential SMB guide for technology financing

SMBs are often constrained by tight budgets and minimal staffing. To drive business forward, it's critical to look for the most cost-effective IT spending strategies.

For small to medium-size business, success in today's hyperconnected and data-driven world depends on investing in technologies that underpin a digital transformation strategy. However, compared with larger firms, SMBs face several challenges that include budget restraints, smaller IT teams, and a digital skills deficit.

In addition, as an SMB, you must navigate a fast-evolving business landscape not knowing what the new normal will look like. As a result, you are simultaneously assessing if your current and planned infrastructure is adequate, and if you have the necessary tools and processes in place to recover, remain competitive, and grow.

IT budget considerations for SMB finance

The business world is becoming increasingly digital, mobile, and always connected, which means technology must be at the core of every business operation and customer interaction. How does this correlate with a technology strategy and budget?

The top considerations for SMB finance in 2020 should include:

  • Assessing and overhauling IT systems as part of a technology transformation to improve efficiency and delivery in a digital economy.
  • Deploying technology and tools that provide the business agility to quickly adapt to changing market conditions.
  • Ensuring business continuity in the face of ever-increasing security and external threats.
  • Addressing the changing nature of the mobile workplace as the business becomes more connected to customers, suppliers, and partners.
  • Improving the customer experience to meet rising expectations.
  • Overcoming legacy inertia by resolving the conflict between incumbent, legacy, and new technologies.
  • Boosting operational efficiency and productivity.
  • Becoming a more sustainable business.

The top technology investment drivers are reducing costs, increasing revenue, improving operational efficiency, and improving IT capability with the goal of improving business agility and enabling innovation.

 

Challenges blocking technology investment

Analysts say the most significant challenge midmarket IT organizations face is delivering IT services with small teams and limited budgets. But budget limitations are not the only problem IT departments face as they look to modernize. Legacy inertia can be difficult to overcome, and when combined with the usual problems of lack of cash flow and appropriate skill sets, lack of strategic direction in the organization can be a serious deal breaker.

Fortunately, new technologies and services make it possible to embrace new opportunities and need not be limited by what is available right now in your IT budget.

Here are the basic steps to finding the financial solutions that help you plan for, acquire, consume, and adapt the technology systems your business needs for business transformation.

Unlock budget to accelerate your transformation.

If you have old IT equipment that is currently sitting idle or will become redundant once you move to a new solution, use it to unlock the capital required to fund your digital transformation projects. For example:

  • Return legacy equipment to vendor renewal centers to be repurposed, or retired it in a secure, compliant, and environmentally friendly way.
  • Trade in older equipment and recover its value, resulting in incremental budgets that fund innovation projects.

Avoid upfront investment and pay per month for new technology.

It is now possible to consume IT infrastructure in much the same way you subscribe to other business and personal services. Whether you are running key applications on premises or in the cloud, all your IT needs can be consolidated into a predictable monthly subscription fee. For example:

  • Ensure you have access to best-in-class compute, storage, and networking hardware, software, accessories, and support.
  • Take advantage of "subscribe, use, return, and renew" consumption models, which means you are always using up-to-date technology without the burden and maintenance costs of old IT.

Mitigate the risk of new IT project investment.

Transformation often begins with an experimental or pilot project—the success of which will depend on implementing new foundational technologies.

But how do you reduce the financial risks associated with such projects? Find the most cost-effective way to efficiently bridge the gap from where you are to where you want to get to.

  • Pay monthly for new and preowned compute, storage, and networking data center solutions.
  • Reduce the investment if expected results are not realized or plans change using equipment return options so you are not stuck with technology you no longer need.

Flex your IT investment up and down as business demands.

Your ability to deploy new, faster, and more agile IT infrastructure is an essential enabler of your digital transformation, but sometimes it is difficult to predict what your needs will be. Events unfold that may leave you with excess equipment or you experience an increase in demand with insufficient budget.

You can acquire the IT you need for a monthly payment, and if you need to make an adjustment, you usually have the option to return unwanted equipment.

Rent what you need only when you need it.

Renting equipment is an ideal option to support a short-term project or seasonal requirements. This is also a practical solution when you undertake a planned migration to new technology and need equipment to fill a gap for a short period of time.

Positioned for a successful future

These forward-thinking investment strategies make it easier and affordable for SMBs to access and use new, advanced technologies in a way that preserves cash flow. They provide a way to accelerate your digital journey, enabling you to be transformative and operationally more efficient and productive, and keep ahead of your competition.

This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.