All Posts By

Ed Grauel

Jan 21
0

An IT Budget Cheat Sheet

By | Blog, Insight

No one looks forward to IT budgeting. No one. Budgeting is a fact of life and part of ensuring that IT is leveraged to support the overall initiatives of the enterprise. An IT budget must both drive and support strategic initiatives so a clear roadmap of business-wide objectives is critical to effective planning for future efforts.

Sometimes the urge to just update last year’s budget can be an easy solution. We get that. Tech departments can be overburdened and extra time is as rare as a Browns Super Bowl appearance. Unfortunately, just updating an old budget likely won’t appropriately incorporate new directions for the business overall. Strategic objectives change each year and IT has to keep pace or the business will struggle to achieve goals.

While IT dollars are expected to be invested in technologies that drive future growth, there are plenty of businesses that continue to put money towards their digital transformation journeys.

A simple way of starting an IT budget is with the basics as follows in this IT Budget Cheat Sheet:

IT Budget Cheat Sheet

Ongoing expenses

Staff and compensation

  • Recruiting and staff acquisition
  • Internal staff
  • External staff (staff augmentation providers and contractors)
  • Total compensation (benefits, training, travel costs)

Infrastructure

  • Servers
  • Client computing resources (laptops, tablets, etc.)
  • Network infrastructure
  • License and support renewals
  • HVAC
  • Utility power
  • Battery Backup and Generator Costs

Software

  • Licenses
  • Subscriptions
  • Support/Maintenance contracts

Project expenses

For each project

  • Consulting expenses
  • General and administrative (temporary office space, etc.)
  • Hardware
  • Software

The state of IT budgeting for 2020

In 2020, IT budget spends will be diversified over a much broader range of categories (e.g., digitalization, mobile computing, employee training, agility, flexibility, ability to work from anywhere) than in 2019, when IT budgets were heavily invested in security and cloud services as many major operating systems approached end of life. Security and cloud services will still lead investment categories, but many organizations feel they have attained many of their initial goals in these areas. It is critical to do what’s right for your company.

There are indications that more organizations want to fully understand just how much they spend on IT across the company. From a budgetary standpoint, this has sparked a movement to consolidate more of the IT spend (and assets) under a single umbrella, with IT in charge.

In response to the mixed performance of ROI formulas and cost overruns, CFOs and other IT budget decision-makers will likely expect more input from proof of concept exercises and successful trials before approving funding for new technology expenses.

Critical tech investments for 2020

Critical initiatives to consider for 2020 funding include cybersecurity, automation, infrastructure and data. Business confidence in dealing with threats is growing, however how businesses decide to allocate funds to tackle cybercrime may potentially change.

As predicted, businesses across verticals have begun to invest more in automation technology. Leveraging automation to eliminate mundane and repetitive tasks enables employees to engage in more meaningful work that helps drive business objectives.

The vast amount of data created from the Internet of Things devices has driven businesses to think about the value that can be extracted, and this is showing up in the IT investment decisions made by businesses. As an example, IoT provider, AGT International, works with industrial clients to manage and protect infrastructures through IoT analytics including video analytics and sensors.

Who should be involved in IT budgeting?

Despite enterprise desires to consolidate spends and asset tracking in IT, Shadow IT and end-user engagement in technology purchasing decisions are still very much alive. What has changed is that more end-users (and management) want IT to actively engage in preliminary technology decision-making processes. This ensures that the technology they want to buy can be used with other existing systems.

A good approach for IT is to take the lead by visiting various user departments in advance of budgeting to see what types of technologies they’re considering for their own business operations.

The role of the CIO in budgeting

Savvy IT leaders will demonstrate the value provided by their budget. Impactful areas of note promote internal and external objectives, from greater stability and operational efficiency to enhanced customer experience and assurances of a secure platform used to conduct business.

Great CIOs understand the balance sheet and P+L ramifications of investments made by IT on behalf of the company. Effectively leveraging the appropriate expense categories (cap-ex, operational expense, amortization, and financing options) and working with a CFO or other financial decision-maker ensures that spend aligns with the financial goals and capabilities of the organization.

Dec 06
0

What’s Driving Your IT Budget in 2020?

By | Blog, Insight

More and more companies are realizing the benefit that technology brings to their growth. No surprise there. And it makes perfect sense that experts predict that 2020 budget levels will keep pace with 2019 levels in spite of economic uncertainty. Technology is that vital.

We took a look at a study conducted by Spiceworks which says that budget drivers vary by company size and location. For example, “a greater priority placed on IT projects” is the top factor influencing IT budget growth in enterprises, likely because large organizations are typically better funded and have more resources to allocate against strategic initiatives than smaller businesses.

Plus, the more you’re managing in terms of data, departments, employee devices to connect, manage and secure, 25% of enterprises are also increasing IT spend due to a recent security incident, compared to only 4% of small businesses.

Across all company sizes surveyed in that study, budget highlights within each category include:

  • In hardware, budget allocations for laptops (17 percent), desktops (17 percent), servers (14 percent), and networking (8 percent) hardware top the list.
  • Top software budget allocations include operating systems (13 percent), industry-specific applications (11 percent), productivity suites (10 percent), and virtualization software (10 percent).
  • In hosted/cloud-based services, budget allocations for online productivity solutions (14 percent) top the list, followed by online backup/recovery (12 percent) and email hosting (10 percent).
  • Top budget allocations in managed IT services include managed hosting (13 percent), managed hardware support (11 percent), and managed storage/backup (11 percent).

 

So, what should you consider when developing your IT budget for 2020? What drivers should you pay attention to and which can you pass over this year? The critical thing to remember is that you should fund based on your company’s situation and not just do a cookie-cutter solution that may not fully support your strategic plans.

We’ve identified some components that we think are critical and should be considered when determining an IT budget:

Strategic objectives

One thing that we know is that the IT department plays a big role in reaching the strategic objectives of a company. It used to be that IT-supported whatever was defined as a goal of the business. Not that supporting the business was a lightweight effort, but executives are finally realizing that technology can be put to better use. Now technology and digital initiatives are at the forefront of company growth. Savvy business leaders understand the importance of IT as a growth leader and rely on the CIO and other tech leaders to take an active role in strategic business initiatives.

But before any growth heroics can occur, it’s important to define what you will need to accomplish regarding customer requirements and other objectives as they relate to business growth. For example, the IT budget may have to accommodate upgrades to meet critical objectives in the new year. At Calyx, we challenge everything, especially when it comes to customer growth. We’re not satisfied until strategies align with budgets because it’s only when viewing IT as an asset—not an expense—that businesses can accomplish growth objectives.

Technology lifecycles

The very nature of technology creates the need for change and updating on a regular schedule. That’s pretty much a fact of IT life. The average lifespan for a desktop computer is only three to five years. Servers start to decline in performance after about five years.

And you know this from personal experience—wireless devices have the shortest life spans of all at approximately 18 months. So when determining your 2020 IT budget, it’s a good idea to document each IT asset with its age so that you can project a replacement date and plan accordingly.

Current IT infrastructure and assets

What infrastructure is in place at your company today? What assets do you own? We’re talking hardware, software, servers, printers, network infrastructure, phone systems, mobile, desktop and other devices. Identifying your IT assets will help you develop an appropriate budget by listing everything at the beginning.

Keeping infrastructure current is projected to be the biggest IT challenge for companies in 2020. Businesses will need to address security best practices as well as incorporating a blend of onsite infrastructure and cloud-based services.

From our perspective, company size will also affect budgets for 2020. Small businesses will face security issues and disaster recovery solutions while large enterprises will be challenged when integrating technology innovations into their current tech environment.

Projected revenue

Any budget within the enterprise is contingent upon current and projected revenue for the business. No more, no less. Your IT budget will be contingent upon how much revenue is coming in today and how much is projected for 2020. Makes sense. But you need to account for the state of your revenue. If your business is in a rapid growth phase, you might have to increase normal funding to make sure your infrastructure can handle all the demands you’re going to place on it.

Experts predict that a large number of organizations will direct most of their 2020 budgets toward security and cloud initiatives. We agree that those are critical. But it’s also important to allocate portions of budgets to mobile initiatives, infrastructure upgrades, digitalization and staff training.

What’s our advice on what should drive your 2020 budget? Know your organization. What are your strategic plans for the new year? Be honest about the current state of your infrastructure. There’s nothing worse than not being able to support—let alone drive—business initiatives. But above all, stay strong on recommendations and continue to monitor IT support to grow your business.

Aug 19
0

Calyx Recognized Among Inc. 5000’s Most Successful Companies

By | News

We’re thrilled to announce that Calyx has been recognized as one of Inc. 5000’s Most Successful Companies in America, earning #5 for companies in the Cleveland Metro area, #26 in Ohio, and #1323 nationally.

Calyx redefines managed services with enterprise IT solutions for small to mid-sized businesses. With a complete ecosystem of enterprise-class IT-as-a-service solutions, from assessment and consulting to a fully-managed cloud environment, network and support, to business intelligence, Calyx empowers clients to work with greater efficiency, productivity, and profitability.

“Calyx is driven by our purpose to always create a better way for our clients. That requires us to show up as our best selves to anticipate their needs & respond with the best technology & support possible. Our values guide and anchor us. We challenge everything. We do what’s right, and we own it” says Jason Fordu, Calyx CEO.

Inc. is an American weekly magazine which publishes about small businesses and startups. The magazine publishes Inc. 5000, an annual list of the 5000 fastest-growing privately held small companies in the U.S. The list is a distinguished editorial award and a celebration of innovation and entrepreneurial leaders. The Inc. 5000 ranks companies by overall revenue growth over a three-year period. All 5,000 honoree companies are individually profiled on Inc.com. The top 500 are featured in the September issue of Inc. magazine, the leading entrepreneurial advocate for 38 years running. Inc. also ranks the fastest-growing companies by industry, metro area, revenue, and number of employees.

Aug 14
0

How to Choose the Best IT Solutions Provider for Your Business

By | Insight

More and more companies are realizing the benefits of working with an IT solutions provider — often referred to as a Managed Service Provider (MSP) — to help utilize technology better, ideally increasing efficiency and productivity, while assisting with security, support, and projects like cloud migration.

There are components that form the foundation of smart MSP partnerships that are nice to have. And then there are the critical components that may not even be on the checklist when considering partnering with the right MSP. Understanding these known and unknowns is critical to selecting the right partner for your business.

Calyx takes a different view of providing managed services than most others do and we want to share our perspectives here to help businesses understand that choosing the best MSP hinges not so much on the provider, but on you and your company.

They establish trust.

A best-in-class Managed Service Provider isn’t in business to sell technology and services to benefit themselves. They are sincerely interested in helping their clients achieve success through business growth and becoming a trusted partner. Trust is something that grows throughout the course of the business relationship but there are clues at the beginning of the partnership that indicate a strong intent.

Some things to consider when evaluating a new MSP partnership are tangible such as IT support, security initiatives, budgets, etc. but you should have a good feeling about your interactions with a Managed Service Provider before entering into any agreement. They should welcome any and all questions and happily provide references. Remember, this is the future of your business and you need to trust any other providers who enter into that critical zone.

A provider who has a fast answer to every question or seems to have an off the shelf solution to any business challenge should be vetted carefully. Having an established way or principle is critical, putting every client within a single product, service or other “box” does not ensure fit.

They identify the gaps between IT and business objectives

Most businesses lack a comprehensive understanding of their true cost of IT, how it relates to business objectives, or where they stand relative to competitors and industry standards. This clarity will help you organize and prioritize your current and future objectives, and help you make better business decisions. Identify an IT solutions provider who is willing to invest the time in comprehensive discovery and planning to ensure ongoing alignment between business plans and IT strategy. In doing so, you’ll ensure that you’re on the same page technically, philosophically and financially, and have a firm foundation for future success.

The best MSP will design a total system that promotes your business growth.

An exceptional Managed Service Provider knows that it is supporting the growth of your business, not only your technology. To support the growth of your business, your IT partner must work in lock-step with your business to ensure that your IT overcomes today’s challenges and prepares you for the future.

They’ll want to know your tolerance for risk. What are your business-critical processes? Are there any possible bottlenecks that could be eliminated by technology? They can only build the ideal support plan for you if they know what challenges you face and how you plan to address them.

Understanding your overall business strategy and how technology aligns with your goals is the foundation of a true partnership. Knowing what is needed today to be successful, paired with strategic planning for future needs, is the road to a productive relationship.

Don’t base your decision on pricing only.

We’re talking about the IT operations, security, ongoing support and growth of your business. So basing your decision on price alone is not a guaranteed recipe for success. IT should be an investment and an asset, not just a cost center on your P+L. This isn’t a lunch special. Trust that a best-in-class MSP will always be looking for new ways to improve your IT operations and will offer continual recommendations. Some of these may add to the budget but you will always get a thorough explanation as to why they’re critical and how they’ll add value in moving your business further toward desired growth.

Reputable IT solutions providers will also look for ways to make more effective use of your money, either cutting cost where possible or looking for improved technology for your spend. This is part of that trust issue that builds over time. They are looking for ways to benefit your long-term business success and cost just shouldn’t be the first factor in making such an important choice. Look for a partner that provides value beyond the bottom line. As Warren Buffet suggests, “price is what you pay, value is what you get.”

Service and support, without passing the buck

A common complaint among business who’ve experienced frustration with their MSP is lack of accountability. All too often, providers pass the buck and place blame when a technical issue arises. The right IT solutions provider ensures white glove, end-to-end-service and support, working on behalf of the client as their single point of contact. It should be clear that their sole interest is to address issues in a timely manner and mitigate future issues whenever possible. Look for a provider who is willing to be candid and accountable when things go wrong, not providing unclear answers or passing the buck.

Look for industry-specific expertise.

MSPs are expert in technology, security and execution. But you’ll want to partner one which has experience working with other companies in your industry. Many IT initiatives share the same equipment, same processes, same philosophies. But if you have a financial business, it helps to know that they have dedicated experience working in the financial industry.

Knowing that they know about financial companies puts them ahead in the learning curve with you and they know what to look for on a daily business. It’s another one of those aspects that build trust at the onset and as time goes by. The same holds true across any industry. Having shared experience or knowledge only serves to build a more successful relationship.

A total solutions pricing model

It’s typical for MSPs to provide clients with a Chinese menu of options, from technology platform to security and backup/disaster recovery, from upgrades to capital equipment. Nobody likes to be nickel and dimed. The limitless line item options are overwhelming and fail to provide clarity to business decision-makers. Further, they often bind the client to a lengthy contract term. Look for an IT solutions provider who, rather than intentionally mystifying the process, adds value by simplifying the complex. Calyx, for example, offers a simple pricing model based on two key line items — people and locations, with no contract term. Hardware expenditures, which often require investment, are included.

Explore their penchant for innovation.

The best-in-class Managed Service Providers are always improving their skill sets and recommendations based on new technology and solutions. They’re inquisitive. They’re proactive. And they’re resourceful. They need to bring you the best growth recommendations, and that requires innovation.

How will you transfer to the cloud? What are your mobile strategies? What internal efficiencies can save time and money? You don’t want an MSP to plug and play with your business. You want qualified recommendations that will build trust and drive the growth of your business.

These are all great things to be on the lookout for when looking for the best MSP for your business. Calyx delivers on all counts. When you partner with us, you’ll see lower Total Cost of Ownership, business scalability, streamlined processes, better continuity, security and more productivity for your business.

Aug 10
0

The Spark to Ignite Powerful IT Change

By | Success Stories

The Challenge

There are few things more important than high speed and performance for large, industrial companies, especially if you’re Earnest Machine. However, the company’s small and mighty IT department was stretched too thin, supporting dozens of users across an expansive network of distribution centers in the U.S. and U.K. With big goals to fulfill, they knew it was time to shift from working in the business to working on the business. To do that, they needed an IT partner that would eliminate the everyday headaches and bottlenecks so they could refocus on transformation and growth.

Calyx frees me up to do smarter things with IT, rather than just being a day-to-day server jockey. – Don Steiner, IT Director

Insight

Earnest Machine was in search of a holistic solution that delivered efficiency, flexibility and, most importantly, scalability to support the company’s progressive mindset. While they’d worked with fully-managed providers in the past, they wanted a partner that delivered not only a quality product, but the experience and expertise needed to keep them ahead of the curve. Fortunately, they discovered that Calyx was able to bring together everything they looking for, plus even more.

Solution

Earnest Machine selected the Calyx Framework™, a turnkey, fully-managed IT solution that eliminated the guesswork and hassle of moving their operations into the cloud. In addition to its enterprise-class, multi-layered security, simultaneous system updates and improved file accessibility, Framework is backed by a responsive support team of IT experts that provide an enhanced level of guidance that you just don’t find with any of the big players.

It was like getting a set of golf clubs and an instructor, too. We became one big team working together.” – Don Steiner, IT Director

Impact

With Calyx Framework™ now handling much of the company’s day-to-day IT issues, Earnest Machine’s IT department has completely revolutionized the way they do business. They’re focused on more meaningful work that will drive ROI while Calyx serves as their first line of response.

Best of all, Earnest Machine’s employees are noticing the impact on day-to-day operations and productivity. Instead of being the traditional point of frustration, IT has transformed into the company’s hero.

Download a PDF of this Success Story

May 14
0
How to Accurately Assess Your IT Spend

How to Accurately Assess Your IT Spend

By | Insight

How do you know if you are spending the right percentage of your budget on IT? It can be a tricky and deceiving line item to manage. Many companies don’t consider the risks associated with not having a comprehensive IT infrastructure in place. But how do you know what you need? Your company’s IT budget is affected by multiple variables, including protocols, compliance, current technology, and business needs. Having a complete understanding of your industry standards, current IT requirements and spend is a great place to start.

When allocating the IT budget, business leaders need to balance the requirements along with the overall needs of the business to evaluate the opportunities for digital transformation for both long term results and spend.

Today, technology is not just a business enabler. It’s a competitive differentiator. It’s important to make sure you’re at least keeping up with peers in terms of IT spending, if not seeking ways to gain an advantage through technology.

A study by Deloitte Insights found that companies spend on average 3.28% of their revenue on IT. The study also found that of high-performing companies (those that consistently outperformed the S&P), 57% increased their IT budgets from 2016 to 2017.

Benchmarking your IT spend relative to peers is a valuable exercise to make sure you’re not falling behind. A Deloitte study illustrates IT spending as a percent of revenue, by industry.

Enterprise IT has been highly resistant to change and thus forces companies to decide between acting quickly to deal with elevated risk or moving slowly to mitigate risk. But when the cost of a security breach can cost more than the value of your company, there is simply no choice but to evolve. But where do you start?

We’ll help answer some common IT budgeting questions and share insight on how to approach your IT budget.

What are you currently spending on IT?

To first understand what you need to spend you must know what you are currently spending. Many companies to do not have an exact figure on the true cost of their IT. To begin, do a thorough analysis of your IT expenses.

Your IT budget should include everything from computers and servers to software, apps, cloud services, cybersecurity web hosting, maintenance, telecommunications, audiovisual equipment, outsourcing, consulting, travel, and of course, your IT staff.

Need help evaluating the total cost of IT to your business? Contact us here for more information and a free diagnostic evaluation for qualified businesses.

Where should you focus your IT spend?

The focus on your IT spend will depend on your industry. In years past, businesses primary spend was on automating back-end systems and maintenance and upkeep of infrastructure. Today, technology investments need to align with your business goals. Your IT is entwined with every business function and has the potential to increase revenue, performance, and competitive advantage. And while there is no right place to spend your IT budget, the most common spend is on data center systems, enterprise software, devices, and communication services.

Are you comfortable with your level of IT risk?

Cybersecurity is a significant and growing IT issue. Just look at the news. Every day you can find a large company that has experienced a security breach. Most executives have a poor understanding of the risks. Do you know all of your risks?

You need a comprehensive system for managing IT risk that assesses not only the threat and cost of an attack but an understanding of how you will restore your data and get your business up and running again with minimal downtime.

Does your IT roadmap reflect the full potential of technology to improve your business?

Technology can increase revenues, reduce costs, and lower risk. By updating and staying abreast of technology advancements and mitigating threats, companies can dramatically improve their overall business outcomes.

Ultimately, the strategy that emerges from a thorough IT assessment and integrated plan should place your business goals at the forefront. An intensive, well thought out IT plan is not merely a revised annual IT budget, but a tactical plan that should provide a competitive advantage for years to come.

Spending your IT budget wisely entails IT not only provide an infrastructure to serve data but also improving your overall business. Understanding your current IT spend and how best to leverage IT for business success is key. If your company doesn’t have internal IT staff or a CIO that can evaluate solutions, consider hiring an IT Solutions Provider.