IT Best Practices
in the SME
Sean Patterson for Access VG
Goals of the study
• Understand the demands of information technology in the small
business environment
• Determine information technology best practices
• Develop a metric for determining ROI success
• Understand how off-the-shelf solutions, that include technology from
Apple Inc., can benefit a Small-Medium Enterprise (SME)
Biggest problems with IT for the
small business
• Extraordinary capital expenditures
• Training costs - both real and opportunity costs
• Lack of IT-specific staff
• Misconception about benefits to developing IT best practices
• Short-term outlook
• Long-term outlook
IT as a capital expenditure
• Leasing,: a good option for SMEs, with typical leases being approximately 36 months
• The maximum section 179 deduction you can elect for qualified property placed in service in 2008 has
increased to $250,000.
• Computer software: use the straight line method over 36 months
• Hardware depreciated over a 5-year recovery period.
• 50% special depreciation allowance if the computer meets certain conditions.
• Web site expenditures: U.S. IRS has yet to issue formal guidance on the treatment of web site
development costs. Informal internal guidance suggests that companies treat those costs like an item of
software and depreciate them over three years. Taxpayers who pay large amounts to develop sophisticated
sites have been allocating their costs to items such as software development (currently deductible like
research and development costs) using the Code Section 179 first-year expensing election and even as
currently deductible advertising expenses.
Challenges of IT as a capital expense
• Technology in a service business tends to be a significant startup
expense.
• Off-the-shelf components tend to be far cheaper than custom
equipment/applications, but can lead to interoperability issues.
• Implementing IT correction upfront is always cheaper than correcting
it later.
Handling training costs
Tracking ROI: sunk costs + opportunity costs = total expenses
Metric: Success = training benefit > total expenses
• Training should not be the first expense to be cut during hard economic
times – must remain a strategic priority.
• Training should be continuous throughout the year, but business should
be sure to emphasize training opportunities during off-peak periods in
the business cycle.
Minimizing staffing costs
• Setting a higher expectations for new employees, e.g. younger workers
tend to be more tech-savvy
• Keep systems simple to avoid excessive breakdowns and need to hire
IT staff full-time.
• Outsource, outsource, outsource – web, help desk, and application
development should all be done by a third party – qualified IT
professionals can easily add $100K to annual expenses. Outsourcing
costs occur on an as-needed basis.
Misconceptions of IT best practices
Bearing Point’s Frederic Veron
suggests:
• “Common practices” – the new lingo – “best practices” don’t really
exist
• Toolkits are necessary to adapt to each business need
• Difficult to measure best practices
• ITIL 3.0 – a library of IT best practices
• “Productizing” the technology allows you to “sell” the value
proposition of a technology to the organization.
Dealing with IT problem areas
• Cathedral Approach
• Most IT solutions tend to require some degree of customization, so no
one-size-fits-all approach can be applied.
• IT remains a secondary or tertiary priority for SMEs.
• IT tends to be approached from top-down, not bottom-up, which can
limit user buy-in and innovation – transparency may be the answer to
this concern.
ADKAR in minimizing BP implementation failure
Asking the question: how do we change?
Awareness
Desire
Knowledge
Ability
Reinforcement
Short-term technology challenges
in the SME
• Huge credit challenges limiting access to capital necessary to
implement IT strategies
• Challenge to get buy-in in traditionally low-tech companies
• Move toward Open-Sourced Solutions (OSS)
Long-term technology challenges
in the SME
• Future will require further utilities development in developing internet
infrastructure – e.g. WiFi everywhere, 3G/4G mobile phones, fiber optics
in homes and businesses
• New avenues for management, marketing, and distribution
• Web 2.0 will continue development as infrastructure development
increases.
• Applications are becoming increasingly key, but hardware costs will
decrease.
Apple in business
Source: ITIC Corp Survey, January 2009
Apple advantages
• Security better than Windows, OS updates more frequent
• Growing network of retail stores to provide consulting, support, repair
• Low total-cost-of-ownership (TCO); best-in-class resale value
• Easier and faster software configuration
• Strong UNIX open-source development community
Layers of IT in the SME
Mac OS
- Advanced search - Backup (Time Machine)
- Intel/Windows compatible
Applications
- Mail/Entourage/iCal/Address Bk -iLife/iWork
- Excel/Word/PowerPoint
Web
- Google Collaboration - MobileMe - PM tools
- Google Messaging - Google Video - Accounting
Security within the SME
• Security concerns vary by business (e.g. financial institutions (SarbOx)
and health organizations (HIPAA) require very different approaches to
data security)
• Security requires a proactive, rather than reactive approach
- Administrative: spending resources to ensure security
- Technical: regular OS updates, password changes, network protection
- Physical: ensuring documents and equipment are always secure
Mac desktop applications in the SME
Microsoft Office (Excel, Word, PowerPoint)
Apple Mail (integration with iCal and Address Book)
iCal (calendar serving on Mac OS X)
Address Book (web services in development)
Web browsers – pages are changing from static in nature to more dynamic and more
application-based. E.g. Google’s Chrome browser (uses WebKit) and Apple’s iPhone with
Safari
iChat (AIM/Jabber)
Graphics/web editors (PhotoShop/Dreamweaver)
Mac OS X Server in the SME
File sharing
Wiki services - user collaboration/project management
Central software update
Backup services
Fast index-based searching for documents on a server
Address Book
Mail (desktop & web)
Calendaring
Smartphones in the SME
• Trend in mobile telephony: desktop
on your phone á la BlackBerry and
Apple iPhone
• Management-specific apps for
phones, e.g. Salesforce for
iPhone/BB and LightSpeed POS
software for iPhone
3 Words: Backup, Backup,
Backup...
• $2000+ for a full data recovery
• All hard drives fail. It is a question of WHEN, not IF.
• Backing up has never been easier for a small business user. Large and
expensive backup server: NOT REQUIRED!!!
Web 2.0 in the SME
Advantages Disadvantages
Scalability key to success in 2.0 Less control over rollout
Platform independent Frequent upgrades = steeper learning
curves, more time spent retraining
Low IT cost
Google’s place in the SME
Though Google Messaging is increasingly useful to SMEs, the real benefit to growing
enterprises is in Google’s Collaboration applications...
Messaging Docs (sharing) Video
• Inexpensive
• Updates/storage by
• Active online sharing/work anywhere
3rd party
• Recoverability of old drafts • Off-site storage
✔ • Ability to customize
domains
• Presentation through the web
• Compatible with many file formats (.xls,
• Simple GUI
• Worldwide sharing
• Increasing integration
.doc, .ppt, etc)
with mobile phones
• Updates/storage by 3rd party
• Challenging sans web access • No editing
•Lack of offline
✘ capability
• Lacks desktop integration capabilities
• Bandwidth issues
Investigation: Salesforce.com
Web
Web
ads
ads
SEO
SEO
Marketing the SME on the web
Web
Web Site
Site
Q&A
Sean Patterson
[email protected]
