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We’ve been asking, “What’s the best way to economize on technology costs in this economy?” And you’ve been answering…

Ben Modica
Audit Services Intern
The Schwan Food Company

Consider all your options. Just because a solution is cheap or free does not mean it is not good. You don’t need the expensive software for everything. For example, Google Analytics is a free website statistic program that gives you vital informaiton about visitors to your site, and it’s free. I have hear of a company that uses a free web-conference system similar to Skype, and it saves them millions. That being said, cheap software can not be a solution in every instance. Be sure you test the product first before implementing it into your situation.

The bottom line: Don’t be afraid to consider all software solutions. Something that is cheap or free may integrate into your company better than the name brand software that costs you millions. We are in the age of Open Source. This means that companies like Microsoft are losing their pricing power over smaller firms.

We’ve been asking, “What’s the best way to economize on technology costs in this economy?” And you’ve been answering…

Anita Campbell
CEO of Small Business Trends LLC
SmallBizTrends.com

I would not delay spending — just the opposite. You can save money by spending smart.

How? By making sure you are taking advantage of 2 significant tax benefits that were extended as part of the Stimulus bill:

• Section 179 of the Federal income tax code allows you to write off certain expenditures in a single calendar year, instead of depreciating them over a number of years – giving an immediate tax benefit for 2009. Businesses can deduct up to $250,000 for purchases of equipment, including computer hardware and off-the-shelf (i.e., non-custom) software, in 2009.
• To the extent that you cannot take the Section 179 deduction, you may be able to claim a bonus first-year depreciation of 50% of the remainder of the cost of the items purchased.

In effect these two provisions mean that the government is “subsidizing” your IT purchase, through tax benefits.

Add to that strategies such as using Web-based software-services (which usually spread out the cost monthly instead of requiring up-front licenses); the increased computing power you can get from upgraded machines; and the energy savings from today’s more efficient equipment (especially if you use the power-management options that are increasingly built it) and the savings can be layered on. The accumulated savings, along with the tax benefits, really add up.

Links:

http://www.irs.gov/publications/p946/ch02.html

http://www.irs.gov/formspubs/article/0,,id=177054,00.html

We’ve been asking, “What’s the best way to economize on technology costs in this economy?” And you’ve been answering…

Ed Kless
Senior Director, Partner Development and Strategy
Sage Software

My short answer to questions like this is always the same – concentrate on the R before considering the I. All too often firms look purely at cost cutting or getting it cheaper without first and foremost thinking about what are the perceived benefits in terms of dollars. If necessary, one should prepare a risk (benefit) analysis with anticipated benefit multiplied by probability of occurrence. This will yield an analysis amount that one can compare to costs.

We’ve been asking, “What’s the best way to economize on technology costs in this economy?” And you’ve been answering…

Sam Patrick
Owner, PATRICK MARKETING & COMMUNICATIONS, INC

We are seeing many companies cut IT costs by outsourcing IT. Many small and medium sized firms have one or two IT managers on staff at a cost of $60k each on average per year. Organizations like Acumen (www.AcumenIT.com) are providing managed IT services to outsource all or part of this function for a fixed monthly fee that is a fraction of the cost of maintaining a full headcount (or two.) Additionally, Acumen’s consultants are very experienced, having worked in many different customer environments, whereas an IT manager is often very limited in experience having only worked in a single environment. This is a very easy way for businesses to cut IT costs significantly while actually improving the overall IT service/support.

This was the case at SwaimBrown PA. It was very costly to manage and pay for a full headcount for IT. With the recent sale of SwaimBrown Consulting, that IT headcount went away, and SwaimBrown PA is now outsourcing the main IT functions to Acumen.

Many companies are scared and held hostage by one IT manager who they fear controls the IT systems that are critical to the business. It is difficult to manage this person because they are “different,” and it is very costly to maintain the full headcount. In reality, it is quite easy to outsource this to a large IT firm that specializes in IT service and has the knowledge and experience to do a much better job than any one individual can do for a small company.