The Five Costliest IT Mistakes That A Business Owner Can Make

In my line of work, I spend a lot of time with business owners in a variety of industries. I want to share with you some of the mistakes that business owners often make when it comes to managing their IT resources, and help you navigate around them.

Owners of small and medium-sized businesses (SMBs) increasingly find themselves relying on technology to run their daily operations. Because of the unpredictable nature of business ownership, the tasks involved in building a solid IT infrastructure frequently take a back seat to the more immediate demands of meeting sales goals and taking care of customers. And, in reality, this is precisely how it should be. Owners should be able to focus on their core objectives and not get bogged down in the complexities of making their technology work. This leads us to the first mistake we commonly see among SMBs.

Mistake #1: Letting IT distract you from focusing on your core business.

While technology has become integral to the functioning of SMBs, it should not be confused with the business itself. Even those companies whose main products or services are technical in nature need to have a clear distinction between their deliverables and their resources.

The second mistake I often encounter is related to the first. A large percentage of SMBs have an IT infrastructure that has been cobbled together in an unplanned, and, all too frequently, an unmanageable way. This unnecessarily increases long-term costs and blurs the line between running a business and running a network. Because a business’s success depends on well-defined goals, there should be a clear understanding of how your IT investments match those goals.

Mistake #2: Having the wrong goals for technology (or having no goals at all).

In the hierarchy of your business plan, your IT resources should serve your business goals, not the other way around. The way a business works, whether it is recognized or not, is often defined by the limitations of its technology. For example, one particular company I worked with recently did not have an effective way to gather information from field workers in various locations and funnel that information up the management chain. Because of the lack of connectivity and centralized data, their workflow involved a lot of transferring notes and billing information from paper to spreadsheet to accounting application. This illustrates our next mistake.

Mistake #3: Letting technology drive your business and not understanding clearly how the technology is going to help you achieve your goals.

As the role that technology plays in SMBs comes into focus, it starts to become apparent that what is most notably absent from many organizations is a solid and well-planned IT foundation. While some of the appropriate IT elements may be in place within an organization, it is rare that they are properly configured or integrated in a unified manner. Here are some of the questions I ask business owners when assessing their infrastructure:

• Do you have the right connectivity to match your business’s growth plans, budget, and requirements? This involves sizing up and comparing internet connection options like DSL, cable or T1 lines, and laying out the advantages and disadvantages of bundling these services with phone lines and other data transmission requirements.
• Do you have the right firewall in place? What does it do for you? Most firewalls only act as traffic cops, directing incoming and outgoing requests to the appropriate place, but doing little to prevent intrusion, filter harmful or offensive internet content, or block viruses and spam.
• Is your system configuration right for your business? A properly designed workgroup or network centralizes management and reduces the costs of administration and maintenance.
• How long could you stay in business if you lost your customer records or accounts receivable data? Are you backing up regularly and testing data restoration? If data backups are more of an afterthought or you put them off because they are a pain to do, it’s likely that there is a better way to back up your data and protect your business.
• Maintenance — are you really proactive in keeping your technology efficient and reliable? Or do you find yourself (or your IT vendor) spending too much time putting out fires? A properly maintained network will cost less to operate and produce a healthier ROI. Emergency maintenance is always more expensive than preventive maintenance.

Mistake #4: Building your technology foundation by accident and not taking a long-term view.

If you have addressed your business’s IT foundation correctly, you will find that you have a solid environment that is suitable for effective and productive collaboration and integration, a springboard to developing an efficient workflow that contributes to your bottom line.

The pot at the end of the IT rainbow is the ability for employees at every level to quickly and easily get actionable information. Management should be able to see the big picture of key indicators in order to measure the effectiveness of their organizations, and team members should know in real time what they need to do next to make progress toward their goals. This vision of a highly efficient workforce underscores the cost of the final mistake I often encounter in SMBs:

Mistake #5: Procrastination. Failing to count the cost, in dollars and misspent man-hours, of missing the opportunity to improve productivity and increase growth.