IT on a Shoestring

Everybody understands and agrees that information technology (IT) is a key tool for launching and growing a successful business.  Unfortunately, most emerging companies lack the time and resources to stay up with best practices and acquire all of the IT equipment that they would like to have.  In most cases, the founders will need to take a few shortcuts until capital is available from investors and operations to begin creating a formal and scalable IT infrastructure.  Here are a few simple tips to keep in mind from the very beginning:

  • Seriously consider leasing, rather than purchasing, IT equipment in order to take advantage of tax benefits and provide greater flexibility to upgrade to the next generation of equipment when the time is right.  In general, IT equipment becomes obsolete well before the date that it is fully depreciated for tax purposes.
  • Most emerging companies lack the funds to invest in a trained in-house IT staff.  However, IT for the business is usually not something that the founders can afford to spend the time learning about since they need to remain focused on the other key aspects of the business during the concept and launch stage—product development, marketing and contacting potential investors.  The best solution is an alliance with an experienced outside vendor, perhaps even a company from which equipment is being purchased or leased (i.e., CDW, Dell or HP), for technology support and consulting services.  These firms can assess the start-up’s network and other technology needs and design a solution that is scalable and fits within a modest budget.
  • When creating your IT budget don’t forget that most of the costs come after lease or purchase of the equipment—new hardware and software will need to be tested, properly installed throughout the company, and managed and maintained over its useful life.  Another cost that needs to be considered is taking equipment out of service when it is time to upgrade and transitions should be carefully planned to make sure that there is no disruption in in-house productivity and/or service to customers.
  • There is always a crucial tradeoff between cost and performance.  Start-ups often attempt to save money by selecting a low cost alternative that is not able to keep up with projected rapid growth of the business.  The result is lost business and a major disruption to expansion plans.  Whenever possible, companies should make the necessary investment to build a strong communications infrastructure that allows employees to load and share all necessary business data relating to finance, customers and suppliers on a common network that can be accessed from anywhere that the company is doing business.
  • IT equipment should be viewed as productivity tools that make life easier for employees and thus keeps them happy and motivated.  Cell phones, including high end devices such as BlackBerrys, should be made available for mobile employees and work inside the company’s facilities should be eased by providing employees with several monitors so that they can work on multiple applications at one time.
  • Don’t forget to factor security and disaster planning into your IT strategy.  Make sure that data on the company network is backed up and that security measures are taken to prevent the loss of sensitive data in the event that laptop and other off-site computers are lost or breakdown.  Also take precautions against problems that may be caused by viruses and spyware on company networks including the possibility of outsourcing e-commerce activities and e-mail to third parties that are better positioned to deal with those problems.

Once the company is up and running it should be expected that a major IT upgrade will be required every three years or so, usually corresponding to the end of the warranty period on the prior purchase.  This will be a continuing expense for as long as the business is operating and should always be an important consideration in the regular business and financial review process.


8 thoughts on “IT on a Shoestring

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