Do you own a business and feel like your money is going out the window, and no amount of money or is coming back your way? If yes, check where your money is being spent. Shockingly, the biggest reason for money being drained from most companies is within technology. Want to know why? We have found several factors that are financial risks associated with IT and technology and ways to possibly minimize or eliminate them.
1. Spending money on unnecessary tech
Many times, we spend money on tech without thoroughly thinking about the requirements. We often buy things in the moment that seem fancy but are not always necessary. Similarly, some business owners spend money on software that is flashy but not “required”. For example, a business may have sufficient internet speeds but still spend money on internet service upgrades and fiber optics just because another business has them. Even if you feel like getting fancy tech for your company is necessary, do it only when you know your company is in good financial condition. It can be risky if you just started the business.
2. Learning advanced technology
IT and technology are business sectors that keep advancing, seemingly every few months. However, not all businesses need advanced technology. Still, some businesses spend money getting trained on new technologies involving hardware and/or software. This can be an unnecessary investment; it requires time and energy, often wasted.
Dependency on almost anything can be harmful to a degree. The same goes with tech; nowadays, businesses can be dependent on tech, even for simple tasks. In such cases, it can be difficult for you to carry out basic operations if there are unexpected issues with your technology. You must have experienced stress, anxiety, and loss of time when processing a credit card and the screen froze with a circle spinning. Even in cases of power outages, daily activities will be halted, and the overall work of a business can be LOST.
4. Cyber attacks and hacking
With the great advancements in technology, hacking and cyber-attacks have increased exponentially. Hacking is one such thing that becomes an inevitable threat to all companies. If you become a target of these hackers, there’s a chance that confidential and private information about you and your company gets leaked. Private information being leaked is minor, when the other hacking alternative is having your information held ransom for thousands to millions of dollars. This can ultimately ruin your company’s reputation, result in damaging financial losses, or both. Though this can be avoided by following specific cyber security techniques, such as eliminating outdated technology, the risk always remains and it is paramount to stay vigilant and protected at all times!
5. Experimentation can be troublesome.
As new shinny technologies get released, it can be difficult to recognize if it can be ultimately beneficial or harmful to your business. Therefore, business owners invest in the newest technology understanding there may be financial risks. Although it can be risky to experiment with new technologies…rather than taking those risks, it may be better to try and test in a controlled environment and not risk your business.
6. Risks of disruption
Technology is the lifeline and backbone to all businesses! Technology is utilized around the clock to perform tasks, make our lives easier, increase profits and out customer experience, and at times used by your competitors to outperform you. When technology is implemented with bad results this ultimately could drastically impact your company, disrupt your growth, and radically slow your momentum.
How can you reduce the risks involving IT and tech?
Now that you know about some of the risks in terms of technology. Let’s get to the ways to possibly eliminate some of these risks:
1. Track the money that is being spent
As we discussed, there is always spending on unnecessary tech. Closely track what you spend money on. Verify all technology being utilized, query stakeholders if technology is making their lives easy or time consuming. Make it a routine to go through the expenditures every month, especially if you are a small business owner.
2. Buying from recommended vendors
According to a survey, approximately 40% of applications need to be replaced due to poor quality implementations and features not functioning as promised. If your company requires technical solutions, buying them from recommended vendor reduces the risk of malfunctioning applications draining your business, and increases profits and more time to do what you love. You can sleep better at night being confident that your technology is always working correctly. It can sometimes seem costly, but it is better to invest one time rather than getting it replaced again and again.
3. Know the risks before spending.
When deciding to invest money on technology you have no prior experience with, it’s better to research the risks involved. Make a list of the risks and compare them with the benefits you are getting. Only invest if it makes sense for you and especially, you have a defined return on your investment.
Want to know more about the benefits and risks associated with IT? Get in touch with Vital IT; we are premium IT consultants that are successful in increasing profits and efficiencies for businesses by resolving technical issues that drain companies of their profits, momentum, and growth. We always stand out among competitors with empathy and excellence.