Posts

Save or Spend? IT Decisions for Turbulent Times

/in

Radical changes in government policies, along with unpredictable tariffs and trade policies,  create a level of economic uncertainty that impacts our business decisions. Across all aspects of our businesses, including IT services, is it time to save or spend?

Background

Global Economic Policy Uncertainty Index

Global Economic Policy Uncertainty Index through March 2025

US Economic Policy Uncertainty Index

US Economic Policy Uncertainty Index through March 2025

According to Economic Policy Uncertainty*, the Global Economic Policy Uncertainty Index is the highest it’s been since the index was created in January 1997. For the US, and globally, the Index is at or above record highs seen at the onset of the COVID-19 global pandemic.

With this level of uncertainty, we need to reassess our existing strategies and plans. The trends and assumptions used to create long- and near-term plans may no longer hold true. The lack of clear policies that we can use guides further complicates matters. 

Impact on Our Decisions

How does economic uncertainty impact us as small and midsize business owners and leaders?

Downturns

Generally, when we expect an economic downturn, we focus on saving. With the potential of stagnant growth or drops in revenue, we seek ways to reduce costs. With respect to IT services, these savings can be tangible. Delaying equipment replacements and software upgrades is one common example. Savings can also be intangible, or indirect. Increasing automation and streamlining processes to improve productivity can mitigate staffing needs and reduce the need for additional IT resources and services.

Growth

When we expect a period of economic growth, we tend to spend. More specifically, we focus on investments that enable us to take advantage of growth opportunities. For IT, direct spending often looks like investments in new technologies and services. Indirect investments commonly focus on productivity and automation to mitigate staffing needs as your business grows.

Should We Save or Spend?

For your business, and specifically at your information technology and services, should you save or spend?

You should do both! Save and spend.

Save

Most small and midsize businesses overpay for portions of their information technology and services. The most common culprits are duplicate services. Poor license management, shadow IT, and a lack of lifecycle management often contribute to overspending.

Now is a great time to assess your IT services, for example:

  • Identify areas where you can standardize and consolidate
  • Examine on/off boarding to ensure you remove unused licenses and services
  • Work to eliminate shadow IT services
  • Monitor consumption-based services for saving opportunities
  • Explore using cloud services, such as VDI / Remote Desktops to extend the life of laptops and desktop
Spend

The economy is changing and may require you to adapt to new market realities. These changes may also create unexpected opportunities. 

You want (and need!) to be ready. Investing now can help ensure you are ready to exploit new opportunities, adapt to changing market conditions, and leverage future growth opportunities.

Tactically, look for opportunities with quick returns. One-time expenditures can provide long-term value. 

  • User Training and Support: Help your team get more value out of current IT services; improve productivity and job satisfaction.
  • Migrate more to Cloud Services:
    • Expand support for hybrid, remote, and flexible work patterns
    • Improve security and meet security requirements more cost-effectively
    • Replace fixed capital expenditures with variable operating expenses you can scale based on need and usage

Strategically, explore opportunities to invest in technologies and services that will enable your business to grow.

  • AI-Powered Solutions: Look for ways to improve marketing, sales, customer service, or internal team productivity.
  • Replace or Upgrade: How well are your key systems servicing your business? Could you benefit from better customer relationship management, marketing and sales tools, financial systems, or reporting?

We Will Help

At Cumulus Global, our priority is ensuring that you have productive, secure, and affordable managed cloud services. We work to ensure that you do not overspend on services and to focus your IT dollars on the capabilities and services you need.

Our IT Assessment may be a good place to start. Let us know or schedule a meeting with a Cloud Advisor.

We will help you adapt while keeping your IT services secure and cost-effective.

* Economic Policy Uncertainty is a non-profit research collaboration from Northwestern University Kellogg School of Management, Stanford University, and the Hoover Institution

About the Author

Allen Falcon is the co-founder and CEO of Cumulus Global.  Allen co-founded Cumulus Global in 2006 to offer small businesses enterprise-grade email security and compliance using emerging cloud solutions. He has led the company’s growth into a managed cloud service provider with over 1,000 customers throughout North America.

Cumulus Global Sponsorship of Economic Forecast Forum Helps Area Businesses Adapt to Changing Economic Conditions

/in

Click to RegisterSmall and midsize businesses in central Massachusetts face new challenges as new tax codes, low unemployment, changing regulations, shifting trade agreements, and inflationary risks impact the regional economy in unpredictable ways. The economy is changing and businesses need to adapt and transform to survive and grow.

Cumulus Global, an award-winning managed cloud service provider based in Westborough, MA, is proud to co-sponsor the Worcester Business Journal’s annual Economic Forecast Forum on February 16, 2018 at the Beechwood Hotel in Worcester, MA.

“With a sound understanding how national, regional, and local issues effect the business climate, area SMB’s are better prepared to thrive and grow,” stated Allen Falcon, CEO of Cumulus Global.

As a supporting sponsor, Cumulus Global is helping empower owners and leaders to make timely, effective decisions. Forum attendees will hear from Jeffrey C. Fuhrer, Executive Vice President & Senior Policy Advisor at the Federal Reserve Bank of Boston, along with a panelist of area business and government leaders. Cumulus Global will be on hand to discuss the changing role of technology how businesses can draw more value from existing IT systems and new cloud services.

Friday Thought: Is it Time to Move?

/in

With the popular media focus on the economy, it is natural for the “Tech” press to report on the impact of current economic conditions on IT plans and spending.  Much of the discussion has focused on whether companies will spend on IT initiatives or will they hold off until the economy improves.

I prefer to ask a different question:

On what will you be spending your IT dollars?

For me, IT spending is not a matter of if, organizations should focus on what and when.

For many reasons, now is the time to move to cloud solutions.

  • Ability to Move: For many small and mid-size enterprises, boom times are too busy to upgrade IT systems.  During a slow-down, companies can allocate resources to IT projects more easily.  Successful IT projects are not just technical, they need the involvement and support of managers and end users.
  • OpEx vs CapEx: Upgrading traditional in-house systems requires up front capital, requiring many businesses to borrow or to use valuable cash on hand.  Given the current economy and credit markets, both options pose a challenge.  Cloud Solutions, on the other hand, are an operating expense.  You pay for what you use, when you use it.
  • Lower Costs: For most organizations, cloud solutions will save them money.  Not just in terms of dollars out the door, but in terms of improved communications and efficiency.
  • Stagnation: Organizations that fail to maintain and upgrade their technologies risk stagnation.  “Catch up” efforts always cost more than prudent maintenance and incremental updates.
  • Preparedness: When the economy turns around and growth returns, will you be ready?  Sound planning and effective improvements can prepare you for the next uptick in business and your next round of growth.

Interest in learning more about how cloud solutions might benefit your organization?  Contact me.  I am happy to explore opportunities and options with you.

Economy is Ripe for Cloud Computing

/in

A recent article in the New York Times reported that in the current economy, businesses are spending capital rather than hiring additional employees.  As reported in the article, the Commerce Department noted that

“The equipment and software category alone grew at an annual rate of 21.9 percent, the fastest pace in 12 years.”

When we look  at the stats and trends, we see businesses moving forward with project that have been put on hold.  And, we question whether or not this is a wise move.  Is moving forward with a project that’s been on hold for 12 to 24 months still the best way to go? In many cases, the answer is “No!”.

Many businesses are facing upgrades to core systems and infrastructure — desktop operating systems, office productivity tools, email servers — and are looking to finally move forward implementing collaboration systems.  Much of this demand is driven by aging hardware and software that is reaching end of life and vendor support.

Before moving forward with existing plans, businesses would do well to reassess their planned directions.  The past 24 months has seen a dramatic improvement and expansion of cloud-based services.  During that time, for example, Google has added over 200 major features to the Google Apps Premier Edition suite of services.  And, the rate of innovation and adoption for cloud computing solutions continues to accelerate.

If businesses do not take a fresh look, they stand to miss the improved integration between Google Apps and Windows desktops — Outlook and MS Office; support for enterprise features such as delegation of email and calendars and mobile device management tools; and improve security and management tools.

In short, what was leading edge is quickly moving mainstream.  Reactivating projects without reassessing options means potentially missing better solutions and lowering costs.  And, wouldn’t most businesses rather spend money on people and projects with greater returns than on their infrastructure and email?

If your business would benefit from a free email and collaboration assessment, please let us know.