Surprise! Businesses Who Value IT Outperform Those Who Don't

Author: Craig Pollack Date: Feb 08, 2018 Topics: General Business Owner Blogs

Microsoft Corp. recently released its global SMB IT and Hosted IT Index, which investigates how small and midsize businesses (SMBs) across multiple segments fared during the past year, how they use technology, and how it impacted their business. The research finds that businesses that value IT as an enabler for better business productivity and effectiveness and those that use hosted services performed better fiscally than those that do not.The interesting findings include the fact that despite the flattening of the economy, more SMBs surveyed reported an increase in revenue for 2016 than in 2015. Those who reported growth view IT as critical to their business success.  Let me repeat that...

Businesses who reported growth view IT as critical to their business success.

While I think this is huge, I also have to clarify this.  Every business owner I've ever met THINKS they view IT as critical to their business success.  Yet, NOT every one of them actually acts this way.  From where I stand, it's actually a pretty small percentage that act this way.  There is a difference.  And it's a critical and key difference.

In a recent meeting I attended with various business owners and key decision makers, I threw out the question asking who thought they valued IT and if their IT was critical to their business' success.  Every one of them raised their hands.  Then I asked if they knew or planned on how much they spent on IT.  Only a handful knew what they spent or were of the mindset that they viewed their IT spending as an investment.  Even less had a specific budget as a percentage of revenue planned BEFORE starting the year.  The remainder viewed IT as a cost center (whether they admitted it or not).  One of them (who raised his hand earlier) even commented, "I only spend when I have to AND as little as possible."  Clearly this is NOT the mindset of someone who values IT and sees it as a key component driving growth of the business.

Clearly the study backs this up. In fact of the SMBs that view IT as critical, 60 percent saw revenues grow over the past 12 months. In contrast, among SMBs that stated IT is not important, less than 29 percent saw revenue increase.

In addition, the Index indicates SMBs are seeing the benefits of cloud computing more and more. Over 40 percent of the respondents that use hosted or cloud technology reported revenue rises of 30 percent or more compared with 90 percent of respondents not using hosted technology that saw decreases in revenue. The advantages of hosted or cloud technology are viewed as reduced cost and IT management and maintenance, as well as increased business value, productivity and competitiveness.  This move from CapEx to OpEx allows businesses to invest more IT dollars in more advantageous ways - new software, added features and functionality, improved capabilities, increased access, etc.

One of our successes at FPA has been our ability to align ourselves with growing companies who value IT and see it as an integral part of the success of their business.  There are meaningful acts that back up this thinking - acts like IT budget planning, implementing proactive maintenance, business continuity planning, and looking for meaningful ways to leverage technology to improve business processes.  Also, the perception that ROI is measured against true costs, not just the dollars spent.  What I mean by this is considering the impact of hidden costs of IT when making spending decisions - ie: reduced or lost staff productivity, reduced or lost sales, delayed orders, delayed receivables (impacting cash flow), etc. 

Some businesses truly get the value of IT and some don't.  Luckily for the majority of our clients, they get it!

Let us know your thoughts or share your suggestions in the Comments box below

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Craig Pollack

Craig Pollack

Craig is the Founder & CEO of FPA Technology Services, Inc. Craig provides the strategy and direction for FPA, ensuring its clients, business owners, and key decision makers leverage technology as efficiently and effectively as possible. With over 25 years of experience building the preeminent IT Service Provider in the Southern California area, Craig is one of the area’s leading authorities on how small to mid-sized businesses can best secure and leverage their technology to achieve their business objectives.