A typical expense might be postage or shipping for many businesses or business vehicle maintenance and repairs.  There are few things you can do in selecting those products or services that can provide some greater advantage.  The majority of the selection process for such expenses is based on price.  There are a number of alternatives for each of these and most business owners will select the products and services, and therefore the provider of these products and services, based on which one will meet the minimum requirement for the best price.  That’s understandable, unless one of these products and services somehow had the ability to create some competitive advantage or a return that is significantly greater than the cost of the product or service.  One of my biggest challenges as an owner of a managed services provider company, is helping business owners begin to understand that even though technology for years has been just an expense for most businesses, it can now be transitioned to an investment.  In the past, IT companies have been judged, and therefore selected, based on how well they could respond to service calls to keep the technology environment functioning at a reasonable hourly rate.  In today’s business world, good managed service providers are giving their clients a reasonable competitive advantage by doing all the things required to prevent service calls.  This is a change in dynamics from reactive to proactive.  Comparing the dollar costs of reactive versus proactive will almost always indicate a higher cost for proactive than for reactive…and this is where the challenge begins.  The important question that business owners should ask themselves is “what return will I get for increasing my spending on technology by X% and spending those dollars on proactive instead of reactive?”

Admittedly, the “X” will be different for almost every business owner; however, here are some benefits that should come with such a shift in spending:

  • Improvement in productivity – for reactive services, productivity is limited by how fast the technical support company can respond; for proactive services, productivity-limiting issues should be greatly reduced if not eliminated altogether.
  • Improvement in employee engagement – ever tried to eat spaghetti with a spoon?  It’s frustrating!  That is how employees feel when they are expected to uphold responsibilities using tools that do not work or tools that are the wrong tool for the job.  Employees will be more engaged and therefore productive when this scenario has been taken off the table.  Reactive only addresses the functionality of the tools already in place; proactive takes the time to understand the business and ask if the tools are the right ones to accomplish the mission.
  • Improvement in reputational value – like it or not, customer perceptions are a huge part of almost all businesses.  When companies are hampered by technology that has to be repaired, they lose reputational value with their customers.  If your banking institution had constant issues and down-time with remote deposit functionality, how would you feel about your bank?
  • Reduced risk - Should your business suffer some breach or cyber-attack, then your reputational value with your customers may really plummet!  And that’s just the beginning.  Reactive deals with after the breach or cyber-attack, proactive takes measures to avoid such occurrences from happening in the first place.  If proactive fails, then there is still reactive; but if reactive fails, then the business may be lost.  Wouldn’t it make more sense to start with proactive?

In summary, a direct comparison of costs alone will never make proactive look like a smarter choice; however, if you take the time as a business owner to determine how proactive managed services can impact your business, then you will likely find a way to move an expense to an investment with a significant return!

From the desk of Paul Meadows,
President of Integrated Technology Group