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4 Steps to Creating Next Year’s IT Technology Budget

We’ve hit December and now is the time you will see three things on blogs everywhere: recaps of the year, holiday gift ideas, and planning for next year.  This is a business-focused article, so recaps of this year’s technology will not be helpful to anyone, and we already have an article on what you need to know when buying a new computer. This leaves us with the topic of how to plan next year’s technology budget for your company.

However, this is not merely a compulsory planning article, and your technology budget should not be a token gesture toward financial planning.

We have seen that very few companies take the time to plan for their IT spending.  And when unexpected emergencies happen, these companies are stuck paying thousands of dollars for new equipment and labor costs that they had not budgeted for.  Since these funds were not set aside for these expenses, business owners are often forced to buy lower quality products that will likely break again unexpectedly, perpetuating the cycle.

Here is a fact of doing business in the modern world: IT costs will happen whether you plan for them them or not. New employees get hired, computers die, and servers crash.  Not planning a technology budget won’t prevent these events from happening, they will just be more expensive to fix – both in cash flow and lost business and productivity.  Creating an IT budget will give you the following benefits:

  • Peace of mind: Whenever we feel like we have to spend money, we are upset about it.  Creating a budget will put you in a position of power over your technology. You’ll likely be happier with your spending, rather than resentful.
  • Better technology: When you can plan for things ahead of time, you are more likely to get the equipment and services that are in alignment with your business goals and strategies.  When you make technology decisions from behind the eight-ball, you end up spending a lot of money on something that will merely get the job done to meet the nearest deadline.
  • More efficient business: Robbing Peter to pay Paul is rarely an effective way of doing business.  If you take an honest look at what is likely to happen and what is needed, you can more accurately fund your other departments as well.

Simply using “last year’s support numbers” belies the true cost of next year’s IT spending.

So, what is needed when planning a technology budget?  Most people simply take what they paid the previous year for support and set aside that much.  This belies the true costs of IT spending and leads to the problems described above.  If budgeting is worth doing at all, it is worth doing right.  So take a few hours out of your year, schedule a meeting with your IT provider, and and sit down together to do it right.

The 4 Steps for Creating a Technology Budget:

  1. Have a conversation with your IT provider. Discuss your business goals and needs for the following year. Ask him about new technologies and if it makes sense to switch any major areas, or if it is better to stay the course.  Discuss what software should be upgraded.  Decide which computers and what other equipment will need to be replaced and when.  For a discussion of when to replace computers, see here.  This is the major planning step and should not be skipped.  This is a technology steering meeting and should happen at least once a year, perhaps as often as quarterly to review and reassess.
  2. Calculate hardware and software costs. Take the results of that conversation and call software and hardware vendors to get pricing.  These may change by the time you make the actual purchases, but not by much.  Gather pricing for new computers, networking equipment, new software, software version upgrades, and licensing.
  3. Calculate support and project costs. Now that you know how much you will spend on software and hardware, it is time to calculate how much it will cost to set up and support it all.  First, consider normal IT support.  Your IT provider will be able to help with this number, but last year’s support costs are a good place to start.  If you are planning on hiring more employees, you will need to consider them in your calculations.  To do this, simply divide last year’s IT support costs by last year’s number of employees to get an average cost per employee for support.  Then multiply that by the number of employees for next year.  Now think about other support costs, including renewing or purchasing support contracts for your business-critical software, and renewing hardware warranties.  Get estimates from your IT vendor on how much it will cost to set up or install the software and hardware you discussed in the first step.
  4. Plan a timeline. At this point, you know how much you will need to spend to keep your technology in line with your business goals and the steps necessary to do that. Now, you can start planning when to do it all.  It doesn’t need to all be scheduled for January 1.  If you are purchasing several computers, you may be able to spread them out across the year.  Look at the projects you and your IT provider came up with and plan out what quarter each should happen in.

Now that you have a budget for your IT spending, you can take your business into the future with the peace of mind and confidence of knowing that your technology budget is in alignment with your business goals and you are managing your IT spending, rather than letting the technology dictate it to you.

Disaster Planning II – Telecommunications & Actions During a Disaster

Planning for a disaster is something we all know we “should be doing” but few of us are.  This is the second in a series of posts that will provide a starting point for disaster planning and disaster preparation on the technology front.  This post will cover telecommunications, and what do do while you’re down.  The previous one covered backing up and restoring data, and the next will be on replacing equipment and restoring software.

“Myth: Disaster Planning is all about data backups.”

Most of the articles and discussion regarding disaster planning and recovery is about data and what to do before and after an emergency. This article will discuss telecommunications, as well as what to do while your are in the middle of a disaster.

 

Telecommunications

Telecommunications is a fancy term for your telephone system.  Sometimes it also includes a connection to the internet, and we will include it here, too.  When we refer to “disaster scenario,” that can mean anything from accidentally deleted files all the way up to earthquakes and tsunamis that destroy a town.  You should plan all along this spectrum.  If your town is doing construction outside your building and they slip and cut a Fiber Optic line that supplies internet to your building, what will you do?  Will that affect your phones as well?  (Probably, yes.)  Here are some things to consider when planning for disaster situations from a telecommunications point of view:

  • Internet Redundancy: Internet has become very inexpensive.  You can get a DSL or Cable connection to the internet for under $100 per month.  While this may not be fast or stable enough for your day to day use, it may be enough to keep you in business when your primary internet connection is being fixed.  Consider how much money you would lose if the internet went down for a few days.  Now, consider how much you would spend on a couple of years of backup internet access and compare those costs.  Like insurance, it might be worth it when you need it.  Microwave and satellite connections are also available, so if the construction scenario described above happens, you can continue doing business even without a hard line.
  • Telephone Redundancy: The standard basic telephone system that we have been using for a hundred years is one of the most stable technologies you have ever seen.  99.999% uptime.  Most internet connections, VoIP services, and internal telephone systems are not that good.  If your normal telephone system goes down, it is good to have a couple plain old telephone lines ready to conduct a skeleton business from.  Many companies already have a couple of these lines for their fax, credit card, and alarm systems.  If you don’t have any already, they are fairly inexpensive to keep as a backup.  Keep some telephones around that you can plug into these in an emergency.
  • Telephone and Number Redirection: If your office is inaccessible but your business is one where employees can work from home, there are many things you can do to facilitate this.  If the system is Voice over IP (VoIP), employees can take a phone home with them and still make calls from your phone system.  Or they can launch software phones on their computers and use your phone system with a microphone headset.  Or they can log into your phone system (whether VoIP or not) and forward their direct extension to their home or cell phones.  You can log into your phone system from home and change the greeting to let your customers know what is happening.  It also may be worth having a VoIP backup system with a few lines at the ready so a few critical employees or managers can conduct business or be available.  It only takes a few minutes to call the phone company and redirect your company’s toll free number to another location.  If your building’s phone system is inaccessible, you can have all of your normal incoming calls going to a temporary VoIP system with a professional auto-attendant and phone tree which can all be controlled and accessed from your home.

 

Call us today for help in designing your own IT Disaster Recovery Plan

 

What To Do While You Are Down


Here are some things to do during an emergency to keep your business running and everybody informed about what is going on.

  • Switch to Backup Systems: If your phone or internet goes down but the rest of the building is safe, it is time to switch to the backup.  If this is not an automatic switch, you and your IT provider should have a plan in place about how this process goes.
  • Inform Employees: If employees should not be coming into the office, call them and let them know.  The business owner or managers should have– at their homes– a list of all employees’ home and cell phone numbers to initiate this.
  • Work From Home:  Many businesses can conduct a large portion of their business with some or all of their employees working offsite.  If your company uses a hosted email and VoIP solution, calls and emails can continue as normal.  If not, everyone has cell phones and personal email accounts and can do enough to let customers know what is going on.
  • Inform Customers: Update your company’s telephone auto-attendant message, website, and social media sites to let your customers and vendors know what is happen and he status/safety of your business and your employees.  The business owner should know how to do this, and have all the information to access it available at home.

Another term for disaster planning is business continuity planning.  A good disaster recovery plan will include steps to keep your business running, in full or in part, while these things are happening.  This includes backup internet and telephone connections, a plan for informing your employees and customers what has happened and what to do, and the infrastructure and training to continue doing business during outages.

Problems, outages, and disasters will happen.  They can either cripple your business or merely cause a brief bump while you continue along as usual.  It all depends on how well you plan and train for the unexpected.

[box]“Plans are useless, but planning is indispensable”

–Dwight Eisenhower[/box]

While this is a great place to begin your disaster preparation, please remember that technology is only part of it.  Your IT Disaster Recovery Plan should be a part of your greater Business Continuity Plan that includes planning for temporary business locations; replacing inventory; contacting employees, vendors, and clients; etc.  FEMA has a good website (available here) that will help in developing your plan.

Finally, remember that in a disaster, nothing will go according to plan.  Things will get destroyed that you forgot were essential.  Things will survive that you thought were fragile.  Your whole plan may go south in a handbasket, but you will be in an far better place having done the planning. As Dwight Eisenhower famously said, “Plans are useless, but planning is indispensable.”

 

Note: We would like to thank Chris Iovane of Walnut Telecom Group for his expertise in developing the telecommunications aspect of this article.

Disaster Planning I – Backing Up and Restoring Data

Planning for a disaster is something we all know we “should be doing” but few of us are.  This is the first in a series of posts that will provide a starting point for disaster planning and disaster preparation on the technology front.  This post will cover backing up and restoring data.  The next two will be go over replacing equipment and restoring software, and telecommunications and what to do while you’re down.

“We make regular backups, so we’re fine…”

When most people think of disaster preparation for technology, they think backups “We make regular backups, so we’re fine.”  But disaster preparation is much more than simply having a second copy of your data.  Yes, you have backups, but do you know how to take those backups and create a working business from them again?  In as short a time as possible?  The critical question here is: How will I rebuild my company after a disaster?  The answer is to have a full Disaster Recovery Plan in place before anything happens.  Below are some of the things you need to know about data backups and restores as one component of this plan.

 

Backing Up

Backups are the most obvious aspect of disaster planning.  But there is more to good backups than just plugging in a hard drive and dragging over your My Documents folder.

  • Files to Back Up: Most people will remember the obvious things, like their Quickbooks data and the My Documents folders.  But don’t forget the things you use every day like email, Outlook contacts, and web browser favorites.  Depending on what kind of email you have, it may or may not be backed up with your service provider.  Spend a day writing down everything you save, open, or use, and make sure it is all backed up.
  • Other Data: Your documents and your employees’ regular documents are not all that should be backed up.  Think about your business data that you don’t use regularly.  Vendor contact information, software installation files and serial numbers, paper contracts, hardware warranty information, etc. all should be accessible after a disaster.
  • Backup Storage Location: Consider whether your backups are in the same danger as your data itself.  If you keep your backups on a hard drive on top of your server, they will likely be lost in a flood or fire along with the server.  Even taking a backup drive home may not be enough; if a flood or wildfire hits the office it may well hit your home too.  A recent copy of backups should always be stored offsite, preferably in a different climate environment.  Cloud-based backup solutions are very well suited for backups in this respect.

 

Call us today for help in designing your own IT Disaster Recovery Plan

 

Restoring Data

People often forget to consider the restore process when deciding on a backup solution.  There are 3 primary things to consider when restoring data: time to recovery, required equipment, and restoration method.

  • Time to Recovery: Assume you have 1 terabyte of data backed up.  If this data is online and you have restore it all over the internet, it would take 57 days over a T1 line, 7 days over a 12 Mbps DSL line, or 2 days on a 50 Mbps Comcast cable line.  That is if you could get the full bandwidth just for restoring data, and not using it for any actual business. It is faster in most cases to have your backup company mail you a hard drive overnight with your data on it.  Make sure your online backup vendor has the capability to do this.  If you also have your data backed up onsite, it would take a fraction of that of time.
  • Required Equipment: What is required for you to restore you data?  If your data is backed up online, you require a fast internet connection.  If it is on tapes, you require a computer with a tape drive that fits your tapes, and those are hard to find in a local store.  In all cases, you need the same software that backed up that data in order to restore it, as well as computers to restore the data to.  In planning for a disaster, make sure you consider what is required to physically get the data from the backup medium to where you want it.
  • Restoration Method:  What kind of backups did you take?  If you only backed up files, then you will need to set up a computer and reinstall all of the software before restoring any data.  Better yet, if you have install images for your computers, this process goes faster.  Best, if you take the image-based backups, you can write the computer system and recent data all at the same time.

Most backup and restore solutions have advantages and disadvantages to them.  Finding a hybrid backup solution that gives you the best of several worlds is often the best way to go, even if it is a bit more expensive.  If the disaster ever comes, you will be glad you spend the extra money.

Finally, it is critically important that you run test restores regularly, or you won’t know if your backups ever work.  It would be a shame to have a flood hit and then realize that your backups were running every night to a USB drive that someone removed the first week and never replaced.

The best solution, and the one we offer to our clients, is a combination of image-based backups that are stored onsite and replicated in the cloud.  This gives you fast time-to-restore on individual files, fast time-to-restore on entire systems, and a cloud vendor who will ship you a device immediately in case of a disaster.  This solution also includes virtualization, which means you can have a fully functional copy of your server up and running in minutes.  Compare that to the 57 days it would take to download it all from the cloud.

“Plans are useless, but planning is indispensable”

–Dwight Eisenhower

While this is a great place to begin your disaster preparation, please remember that technology is only part of it.  Your IT Disaster Recovery Plan should be a part of your greater Business Continuity Plan that includes planning for temporary business locations; replacing inventory; contacting employees, vendors, and clients; etc.  FEMA has a good website (available here) that will help in developing your plan.

Finally, remember that in a disaster, nothing will go according to plan.  Things will get destroyed that you forgot were essential.  Things will survive that you thought were fragile.  Your whole plan may go south in a handbasket, but you will be in an far better place having done the planning. As Dwight Eisenhower famously said, “Plans are useless, but planning is indispensable.”

Disaster Planning III – Replacing Hardware and Reinstalling Software

Planning for a disaster is something we all know we “should be doing” but few of us are.  This is the third in a series of posts that will provide a starting point for disaster planning and disaster preparation on the technology front.  This post will cover replacing equipment and restoring software. The previous posts covered backing up and restoring data and telecommunications and what do do while you’re down.

 

It is difficult to respond nimbly to a disaster with hardware loss if you have not planned ahead.

 

Data gets all of the press when people talk about disaster recovery planning.  Backups, restores, virtualization, etc. are all talking about data.  This post is about infrastructure: the hardware and software that makes your data usable, and things to know when recovering, repairing, and replacing all of that infrastructure.

Replacing Hardware

Fact 1:  Computer equipment is expensive.
Fact 2:  With IT hardware, you get what you pay for.
Fact 3:  Quality, business-grade computer equipment is rarely available at a store near you.

These three facts make it difficult to respond nimbly to a disaster scenario that includes hardware loss if you have not planned ahead.  However, we are all well on our way to preparing our Business Continuity Plans, so that won’t be a problem for anyone reading this blog….

Here are some things to keep in mind when designing the hardware replacement aspect of your Disaster Recovery Plan:

  • Business class computers usually have to be ordered and shipped. HP computers can usually be shipped the next day, as can some Dell computers.  Other Dell computers need a week or two lead time.
  • Resist the urge to go down to Best Buy and pick up a computer.  You will only find home grade computers there, which we know is not a good idea for businesses.  Spend the extra time and money and buy the right thing, not just the cheap and fast thing.
  • If you must buy a computer immediately, mentally prepare to get a second computer of professional grade as soon as you can.  Donate the store-bought computer to a local charity.  It seems like a waste of money, but it will save you time, money, and headache in the long run.
  • Have a spare computer available.  This can be used for spare parts, as a complete replacement, or as a temporary station for guests or employees displaced by an IT guy fixing their computer.
  • These examples have all been about computers, but the same advice goes for networking equipment, servers, telephone equipment, and any other hardware you need to replace.  It will be expensive and take time, but it is worth it to do it right the first time.

 

Call us today for help in designing your own IT Disaster Recovery Plan

Software

While hardware is time consuming and expensive to replace, software is just the opposite.  As long as you have backups and documentation, replacing software should be inexpensive and relatively quick. Here are a few ways to make sure you are in a good place for software recovery:

  • It seems obvious, but make sure your data is backed up.  Sometimes third party programs save important information in inane locations.  Call the vendor and ask them exactly what needs to be backed up for a full recovery down the road.
  • Back up install CD’s and DVD’s.  Make duplicates of all your install CD’s and store them offsite.  Also, you will obviously need to know where all of your install CD’s are in the fist place.
  • Document all serial numbers and other installation codes needed to get a program working.  Store these codes offsite with your CD backups.
  • If you are replacing computers and installing fresh versions of Windows and all of your software, consider using install images to streamline this process. This a way to build a “master” computer template, designed the way you want it to be for several users, and install it automatically and identically onto many computers.  A small fee in imaging software can result in a huge savings in time and standardization when deploying several computers.

 

Another term for disaster planning is business continuity planning.  A good disaster recovery plan will include steps to keep your business running, in full or in part, while these things are happening.  This includes backup internet and telephone connections, a plan for informing your employees and customers what has happened and what to do, and the infrastructure and training to continue doing business during outages.

Problems, outages, and disasters will happen.  They can either cripple your business or merely cause a brief bump while you continue along as usual.  It all depends on how well you plan and train for the unexpected.

[box]“Plans are useless, but planning is indispensable”

–Dwight Eisenhower[/box]

While this is a great place to begin your disaster preparation, please remember that technology is only part of it.  Your IT Disaster Recovery Plan should be a part of your greater Business Continuity Plan that includes planning for temporary business locations; replacing inventory; contacting employees, vendors, and clients; etc.  FEMA has a good website (available here) that will help in developing your plan.

Finally, remember that in a disaster, nothing will go according to plan.  Things will get destroyed that you forgot were essential.  Things will survive that you thought were fragile.  Your whole plan may go south in a handbasket, but you will be in an far better place having done the planning. As Dwight Eisenhower famously said, “Plans are useless, but planning is indispensable.”