Originally published in the Telegraph
Technology evolves fast these days, so how can businesses afford to upgrade redundant IT?
UK and There is little point shelling out on technology that will be useless by next year. But relying on last year’s IT will be equally foolish. That’s why most tech providers and financiers offer a host of leasing and upgrading schemes.
Here are the basics on how they work for small businesses and why they make sense.
For small businesses, leasing equipment such as PCs rather than buying can offer a much-needed boost in those crucial first months and years.
Leasing ensures small businesses have up-to-date hardware and frees up cash to spend on activities that drive growth, according to small business owners.
For businesses in some hi-tech sectors it’s essential, says Mike MacNamara, CTO of video production company NextShoot. NextShoot relies on high-end computing power to deliver hi-tech effects such as Ultra HD video to clients.
We could get the systems we needed without paying a large lump sum that would have stifled areas such as marketing, which are vital to get strong growthLee Murphy, founder and CEO, Pandle
Mr MacNamara says: “We first looked into leasing when we started the business. We needed to be in a position to offer first-class service without significant capital expenditure.
“In the video production business you always need to be at the cutting edge in terms of processing power.”
The advantage is especially clear when it comes to upgrading machines, Mr MacNamara says: “Leasing our IT means that every two years we update our equipment to the latest versions, normally for a very small increase in the monthly cost. There’s an option to buy but we don’t. Tech moves so fast and we find machines are soon outdated.
“Our advice would be to shop around and haggle hard, especially if you’re looking at multiple units. You’d be amazed how much margin there is in the IT industry and how low they’ll go on price.”
Can faster IT power up your business?
Small businesses do pay fairly high interest on leased equipment but will quickly earn back the difference through faster growth, says Lee Murphy, founder and CEO of cloud bookkeeping software Pandle.
“When Pandle first started, cash flow was an issue, as with any other start-up,” he says. “We leased all the new computers, phones and other systems. The interest was relatively high, but we could get the systems we needed without paying a large lump sum that would have stifled areas such as marketing, which are vital to get strong growth.
“The increased speed and efficiency that kit such as fast desktop PCs bring ultimately increases the bottom line and should offset the interest paid over the term of the lease,” says Mr Murphy. “Having good equipment early is important.”
Any equipment that is used hard represents both a significant investment and also a level of risk if it breaks down. So long as the terms of a lease allow for such use, it can be smarter to rent these devices rather than buy and let the supplier manage the upkeep.
One of the most common devices this occurs with is office printers, where managed print services (MPS) packages mean businesses can cut costs when it comes to supplies and repairs.
According to Mike Mulholland, head of services and solutions at Brother UK, many small firms turn to MPS to reduce costs. “MPS can leave them in a better position to manage print budgets, and also reduce the likeliness of hidden costs,” he says.
“A key benefit to MPS is how it can help organisations outsource the monitoring of print systems. It often connects all devices to one monitoring system, and that can ensure just-in-time delivery of replacement toners and repairs to reduce costs and cut admin time.”
Keep it simple with new technology
Another key advantage of leasing IT equipment is simplicity when it comes to the inevitable upgrades.
Subscription-based models means that firms can work with one IT provider rather than many, says Chris Labrey, UK and Ireland managing director of the digital services business Econocom. This can free up crucial time and ensure that new systems work seamlessly, he says.
“While businesses typically have to work with multiple suppliers, subscription-based models mean they only have to deal with a single trusted provider. This helps to significantly reduce any administrative burden and frees up time for the IT team.”
New equipment is safer
For small businesses, having access to up-to-date equipment also cuts the risk of devastating data breaches, says Simon Pettit, corporate director at technology suppliers Stone Group.
“Old devices can pose a threat to security,” says Mr Pettit. “More often than not they require old software that is vulnerable to data breaches.
“Take last year’s WannaCry ransomware attack on the NHS as an example of what can happen when an organisation has a plethora of outdated Windows equipment.
“This is especially important for small businesses. A recent small business trends report found 43pc of businesses with fewer than 100 employees are victims of cybercrime.”
The new General Data Protection Regulation (GDPR) means that data breaches can lead to fines up to several million pounds, Mr Pettit says.
“As GDPR has now come into full effect, consideration needs to go into the full implications an attack like this would have on a business of any size. Keeping your devices updated is your best line of defence and leasing offers an affordable way to do this.”
Smarter, more efficient business
Digital innovation continues to change every business. Understanding the threats and the opportunities is essential to stay ahead of your market.
To find out more about how you can use technology to drive efficiency and security, visit www.brother.co.uk/business-solutions