A significant number of medium-sized companies don't realise they save on information and communication technology (ICT) costs by using technology services on demand. There is a perception that technology services on demand are only for big corporations.
Investing in ICT can be difficult for medium-sized businesses, as it requires balancing risk with potential reward. There is no question that ICT is necessary to enable competitiveness and to reach clients, but company owners need assurance that technology investments will result in bottom line returns.
Business Connexion's regional chief executive, Sydney Ramutla, says there can be inherent risks in expanding the technology environment, for any business. "There is no question about it - some systems and solutions come at a considerable price. Making an investment in buying technology outright drives up the potential risk should the system not perform as expected," he explains.
There is also the attendant risk of fluctuating business performance. Ramutla draws attention to the changing market conditions.
"Rising interest rates are likely to have an impact on many companies as consumer spending will be reigned in. Businesses that are too closely tied to their technology systems may find themselves overcapitalised should business conditions change suddenly," he says.
There is, however, a better way. "The concept of outsourcing ICT services is well accepted in the corporate world. With the maturity of the managed services model, outsourcers are able to provide companies with services on demand. That means when a company needs more storage, processing power or even use of an application, we are able to deliver that seamlessly to match the business needs," says Ramutla.
Akin to electricity or water consumption, Ramutla says the client pays for what is used. When business booms, the bill will be higher; when sales are slow, the client is billed less. "On demand services, such as the delivery of processing power, e-mail facilities, networking and storage capacity, are a reality. And, while these types of services are widely used by big business, they are ideal for the medium-sized enterprise too," he says, pointing out that smaller companies that do not have large technology budgets are now in a position to take advantage of the same ICT services used by their bigger counterparts.
"On demand delivery of ICT services may well revolutionise the way the medium-sized business uses technology. It eliminates capital expenditure and reduces exposure to risk, while the managed services provider provides the benefit of experienced individuals. It's a delivery mechanism that allows the medium-sized enterprise to accurately match ICT expenditure to business needs," Ramutla concludes.
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