Small Business IT

Time to Upgrade Computer Systems?

by Mark Henricks

A business that uses a shoebox for cash and a paper ledger to record transactions is almost certainly overdue for an information technology upgrade. But nearly any small business owner will occasionally wonder whether it is time to upgrade the business IT systems.

When Should You Upgrade IT?

The best time to upgrade IT is when proven better technology is available at a justifiable cost. This rarely means it is advisable to purchase the latest technology the minute it's released. Just-released IT is usually priced at a premium. It's also smart to adopt IT after it has been out for a while and the bugs have been corrected.

Assuming it's proven, the next question is whether it's better than what you already have. New IT frequently offers greater efficiency and productivity. The technology a firm is using today may appear to be getting the job done. However, older PCs, to use one example, may actually cost more than new machines because of poor performance, high maintenance and repair costs, increased downtime, and lax security. Even if a legacy system handles in-house tasks adequately, suppliers or other partners may request upgrades that will work efficiently with their own IT.

What Drives Business IT Adoption?

While fashion tends to drive adoption of consumer technology, business IT adoption is driven by concrete impacts that the new technology can be expected to have on the business and its core constituencies. For many firms, the most important constituency consists of customers, and new technology is first evaluated for its likely effect on price, service, and other elements of concern to customers. Other constituencies may include employees, vendors, and investors.

Purchase price is obviously a central issue. Business owners should avoid purchasing PCs from big-box consumer retailers, no matter how appealing the price may seem, unless they specifically cater to businesses. These PCs are intended for consumers and may not be properly configured for business use. They may also be harder to service or come encumbered with demo software that's not applicable for your business.

Instead, business IT shoppers should look for machines tailored for their uses. For instance, business PCs may not need the large disk drives consumers request for storing videos, or the high-speed processors used for gaming. And business users may want richer bundles of support, repair, maintenance, and replacement services in order to minimize downtime.

The Price of Upgrading

Online price comparison tools can help business IT buyers get the best prices. If capital is an issue, leasing may provide a solution. Major manufacturers often offer leasing programs that allow businesses to get up-to-date technology without large upfront costs. Leasing also avoids depreciation costs as new technology rapidly becomes obsolete, although overall costs for leasing may be higher.

One of the biggest costs of upgrading IT can come after hardware and software are purchased and installed. Employees need time to be trained and familiarize themselves with the technology. Productivity will likely suffer during this period. Additional costs may be incurred from the labor of transferring data from legacy systems to the new setup.

After-purchase costs such as these are difficult to accurately assess beforehand. Therefore, for any large-scale IT upgrade or one that affects mission-critical functions, it's essential to pilot test new technology to find out how quickly employees get up to speed, how much support is required, and to identify challenges of integrating existing data and work processes with the new system.

If an IT upgrade is carelessly chosen or sloppily implemented, it can make the old system look much better than the new one. However, if it's done correctly, new information technology can provide a business with a powerful competitive edge.

About This Author

Mark Henricks is a freelance journalist covering business, entrepreneurship, technology, personal finance, health and fitness  for leading publications.


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