How to manage your IT as an investment portfolio

Information technology (IT) often accounts for more than 10 percent of an organization’s spending; however, many companies are managing this as an expense rather than an investment.

“You don’t want to think of IT just as a single expense item on your profit and loss statement. Instead, look at it as an ongoing investment that needs to be managed,” says Paul Sems, general manager at Blue Technologies Smart Solutions.

And like any other investment, IT decisions are not easy, so business leaders need to ask:

  • What is the return going to be?
  • How is it going to perform?
  • Is this the right investment when considering other investments I’ve made?
  • What are the risks associated with it?

Only by actively tracking performance to make smart investment decisions, choosing the right portfolio pieces that work well together and managing all risks will you be able to get the most value out of IT.

Smart Business spoke with Sems about how to update your business practices now to maximize this part of your business.

Where do you see companies struggle with IT management?

When businesses see IT only as an expense, they probably don’t monitor performance after installing a new technology. They don’t  have a real-time dashboard that shows how much IT investments are saving or costing.

Another mistake is buying technology without considering the company’s entire IT platform. For instance, several department managers might acquire the technology tool he or she needs without talking to anyone else. The result may be different tools with a lot of overlap.

The last area is risk. When you make financial investments, you take time to understand the risk associated with each investment. From an IT perspective, you need tools to measure your risk as it relates to the impact on your security, data loss, data privacy, productivity or team morale.

Many times executives assume that IT investments are being managed properly, but how do they know? That’s why processes to document, monitor and certify can ensure everything is working as it should.

What can businesses do to improve the way they manage IT?

Companies need the right set of tools, so management can understand exactly how well systems are performing in order to use that information to make decisions. They need to know which systems need to be replaced and how much value improving those systems will add. And by monitoring an IT investment’s performance and improvement, business leaders can see real results and an investment’s worth.

These tools must provide decision-makers with relevant business information, not just how many open tickets were closed or how many CPUs are available. Dashboard reports should tell you: How much did we invest in IT and how does that align with our IT strategy? How much are we investing per customer, per order and per employee?

A company also should implement a portfolio approach to new and existing IT investments to ensure that all investments in your portfolio complement, improve value and reduce risk. It may take some added design and engineering services, but your investment needs a strategy behind it.

Finally, do an IT risk assessment so you know exactly what could go wrong, how to mitigate those risks and how to react if something negative occurs.

How can firms get help with implementing these new tools and processes?

Every organization needs to make sure it has a clear picture of its IT investments. Often, IT departments are very busy, so important-but-not-urgent tasks like managing IT investments can go on the back burner. That’s why you may need to reach out to technology partners who can help produce these types of results. Partners can help you get access to performance benchmarks, implement ongoing monitoring and present ideas for maximizing your IT investments.

Once these metrics are in place, you could get immediate results, such as being able to take corrective actions to mitigate IT risk. You also will have the right data available to aid in making the best decisions about how new hardware or software work with existing technology. And most importantly, you’ll know you’re doing everything you can to get the most of out of your IT investments.

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Why the right IT partner can keep your network healthy and deliver a valuable ROI

Trust is a hurdle that leaders must often overcome before they are willing to hand off management of their company’s IT system. But the reality is that most companies are not experts on IT and thus are not in a position to develop and maintain the best platform for their employees.

 

“In a lot of cases, people just have a hard time handing someone else the keys,” says Ken Vanden Haute, vice president of sales and marketing at Meritech Inc.

 

Risks abound, however, when you choose to manage your own system. You become reactive rather than proactive and you put yourself at risk that your system will fail you at a critical moment because you didn’t have a clear sense of its capabilities and limitations.

 

“If you don’t change the fluids in your car and check your tires and brakes, after a period of time, you’re going to have a problem,” Vanden Haute says. “Computer networks are the same way. They need regular maintenance.”

 

Smart Business spoke with Vanden Haute about finding the right firm to handle this responsibility and how it can deliver a return on your investment.

 

Do some companies still fear technology?

Sometimes, people just get used to doing things the same way over and over again and they don’t always know there are other options out there that can help them do it better. There is still a little bit of fear. But the bigger problem is companies don’t understand that when you have someone monitoring and managing your system, they can make recommendations before you are faced with a critical situation.

 

If you knew you could fix a problem while it’s still minor and before it becomes a devastating blow to your business, think about the ROI on that.

 

What are some clues that you have found a good IT firm to work with?

You want to find somebody who is interested in your business. If you sit down at the first meeting and the firm is telling you that you have to spend money upfront, it’s probably not the best sign.

 

Find someone who wants to diagnose before prescribing a treatment. You want a partner who is willing to put in an investment on their own behalf before asking you to make an investment in their business.

 

When someone comes in and says, ‘OK, you need to do this and this and this and it’s going to cost you this much to get going. But once you do that, then we’ll be willing to work with you.’ That’s not a good sign.

 

What can you do before you meet with the firm to make it an easier process?

Map out to the best of your knowledge what your infrastructure looks like as far as your servers and phone system.

 

Provide an outline of your backbone system and how it has to integrate with your company. Who are your vendors and service providers and what challenges are you experiencing with connection, speed, maintenance and failures.

 

Have a good sense of your current environment and your daily workflow so the IT firm can see how your company communicates.

 

Where is the ROI of managed IT services achieved?

There are some leaders who question how it could be better to have a group of people from an outside firm managing your IT services instead of one internal person. The fact is, however, that it’s hard for one person to do everything.

 

When you hire the right firm, you have the advantage of a help desk and a team that is watching over your system from different vantage points. They can develop a scheduled maintenance program that will head off problems before they occur and keep you posted on what’s been done. The firm can help you develop a plan to take on different projects over time that will improve your system whether it’s a new firewall, stronger spam filters or a better backup system.

 

Project planning really keeps the firm efficient throughout the contract and eliminates down time, which keeps your system performing at a high level. And that means more time nurturing your customers and growing your business.

How to increase productivity and morale with your accounting team

Imagine an accounting team that is able to instantly provide your enterprise with the information and insights needed to make informed business decisions. Or better yet, your business processes are so well tuned that at any point you have instant access to the workload of each team member. Imagine doing all of this without having to replace your existing accounting systems.

Shouldn’t your accounting team be focused on high-value tasks like improving cash flow, managing costs or refining the quality of products and services? Instead, they often are bogged down pushing paperwork and tracking documents, which distracts them from strategic responsibilities.

“When you have well-designed and automated business processes, you supercharge the great people that make up your organization,” says Heather Stump ECMp, business process analyst at Blue Technologies Smart Solutions.

Smart Business spoke with Stump about how improved business processes alleviate pain points for accounting and help differentiate your organization.

How exactly do well-designed business processes help save time?

On average, business professionals spend 18 minutes locating one document — and that doesn’t include copying, scanning or distributing that document. Document management solutions bring structure. These custom solutions allow you to digitize and store documents in a way that is logical to you, making lost paper a thing of the past.

Once documents are digitized, processes can be automated and better tracked. Documents aren’t shuffled from desk-to-desk, but are forwarded digitally. The system monitors work flows to provide visibility and help identify bottlenecks. It can go as far as automatically notifying the responsible party of the delay.

How does mobility aid in making decisions?

Imagine you are out of the office with a client and unable to view business-critical information. Or you are making trips to the office just to review and approve a pile of paperwork. You are not alone. In this mobile world, employees need access to documents and the ability to make decisions on those documents while on the road.

Many document management leaders have developed mobile applications to integrate with tablets and smartphones. These apps provide access to custom search windows and work flow actions for you to view and act on a document awaiting review. The right solution can be customized to internal processes and with the click of a button, the document is instantly routed to the subsequent reviewer — allowing you to move on and your accounting team to complete tasks in a timely manner.

Do you need to replace your existing systems to make this possible?

Sometimes it will be necessary to replace your current business systems, however, many times designing and automating business processes can improve productivity regardless of your existing environment.

Accounting systems focus on managing your data. The value organizations have found from implementing the right document management solution is that it enhances your existing systems.

In many cases, the two systems can integrate in a way that allows staff to view relevant documents without leaving the familiar interface they are comfortable working with. Furthermore, data residing in existing systems can be utilized to streamline the deployment of a document management solution. Leveraging existing information eliminates the need to enter duplicate data and reduces the likelihood of human error.

The idea isn’t to start over. Your solution provider can identify your inefficiencies but also the efficiencies that have been implemented by your accounting team.

How can you get started?

To identify how employees can save time and then redistribute that time to focus on tasks that affect your bottom line, you need to pinpoint an ROI. Whether monetary or timesaving, identifying an ROI exposes true bottlenecks and provides a starting point.

Many solution providers offer business process assessments to analyze what is currently being done and identify areas that are candidates for improvement.A technology expert’s role is to help you identify your needs and begin the search for the right solution for your organization.

Insights Technology is brought to you by Blue Technologies Smart Solutions

How to streamline and automate HR’s workload with document management

The vast array of documentation around a single employee would surprise most people, but not those in human resources.

There are usually between 100 and 200 pieces of documentation that need to be part of the employee record throughout their work lifespan, says Nano Zegarra, director of the Imaging Solutions Division at Blue Technologies Smart Solutions.

This paperwork continues to add up during each employee’s time at a company as he or she adjusts benefits, gets married, starts traveling, switches departments or makes other key changes.

Records of these changes must be kept for a certain amount of time for compliance purposes, even after someone leaves your company. The management involved can be labor-intensive and inefficient.

“It’s a lot of paperwork, but that’s how you protect your organization in a society that has become very litigious,” Zegarra says.

With a document management solution, the process is streamlined with fewer steps and faster turnaround, while the records are less likely to be misplaced, out of date or redundant. The systems also build in accountability with a detailed history that is useful for auditing.

Smart Business spoke with Zegarra about how document management can assist HR in better managing employee records throughout their time at your company.

How do document management solutions specifically benefit HR?

HR by nature is very organized. Most HR departments already have manual processes for on-boarding new employees, handling changes, tracking reviews and more. But paper processes are more likely to result in lost or forgotten pages, in addition to being time intensive.

Alternatively, with document management systems, it’s easy to quickly and accurately track and share records at any time across departments. This enables quick decision-making, significantly reducing downtime and speeding up review and filing processes. An electronic solution also allows you to give employees access to certain aspects of their own records, which cuts down on the questions and requests that go through HR.

With the help of technology experts, document management solutions can either be integrated with an existing HR system or become a new system.

What about companies that don’t want to move entirely to electronic files?

Implementing document management doesn’t mean you need to get rid of paper copies, but it will eliminate time spent paging through records at a file cabinet. Move these to a storage area or basement instead, for back up purposes.

It is worth noting that an electronic document is considered a legal document in Ohio. Some companies have started using electronic versions almost exclusively, such as W-4s with electronic signatures. Employees can easily read and acknowledge new policies and procedures on computers or tablets, as opposed to submitting paper copies of each confirmation for HR to store.

When considering value, how does document management make sense for growing companies?

When you look at HR, there is no ROI. It’s not producing anything, but it does cost you. As companies grow, these costs only continue to increase as HR has more information to track and policies and procedures to document.

However, if you’re looking to save on adding another associate during such growth, document management can ensure your existing HR staff continues to efficiently manage employment processes and relevant documents — the most arduous parts of HR.

And while employers think these solutions are expensive, a basic document management solution is very affordable — especially when you look at the time saved and efficiencies added.

Is there anything else you’d like to add?

Once you add document management to handle HR processes, those processes will change five or six months down the road. You’ll find more inefficiencies in your process as it becomes clear that certain steps aren’t needed, verification is being duplicated, etc. You can continue to improve from there, because when you start automating processes, it builds on itself. ●

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How to understand the integration of your office systems

Curtis Verhoff, Systems Integrations and Applications Manager, Blue Technologies

Curtis Verhoff, Systems Integrations and Applications Manager, Blue Technologies

Even in this recovering economy, businesses are trying to do more with less. While managing existing processes can enable flexibility for the ups and downs of business, incorporating software could alleviate pain points, improve productivity and save money.
“The big question is, ‘How do I improve what I do with my customers, my vendors or my employees?’” says Curtis Verhoff, systems integrations and applications manager at Blue Technologies. “Those are the big three, and every organization is like that — whether it’s somebody who sells widgets, provides professional services or is trying to find donors and support.”
Smart Business spoke with Verhoff about utilizing software to improve a range of business functions.

What are some examples of optimizing your software resources?
These software solutions often deal with enterprise content or customer relationship management, but they also can be transactional, such as helping handle invoices, statements, packing slips or the documents you use daily to communicate with customers. One business recently optimized its existing systems to reduce raw postage costs, saving anywhere from $4,000 to $5,000, or 20 percent, each month.
Two other organizations increased productivity by improving payment management. By adding to its software and adjusting existing systems, one company took better advantage of pricing discounts by paying vendors earlier. The other business tweaked the integration of its current system, getting its elite group of customers to pay on average five to seven days faster, which improved cash flow.

What can maximizing your software integration mean for your business?
In this economy, it’s critical to look at the level of success you’re having integrating your current software products. All businesses have to work harder to maintain their current customer loyalty, while trying to attract new customers. You must be more productive with the same or fewer employees.
Your competitors are already working to be productive and more customer friendly — you don’t want to be left behind. You need to provide advantages to your customers to separate yourself. Highlighting your software solutions through marketing can give your customers an indication of how it will make doing business with you more pleasant and reliable.

How can you discover if you have problems with existing software?
What complaints do you hear from your current staff about being more productive, servicing customers better or doing day-to-day activities more efficiently? Is each department running at peak efficiency? Where is your business not functioning at optimal capacity? If you’ve integrated certain solutions, then what’s the ROI and are you happy with that?
If you’re not hearing about problems, check with your managers. Some managers don’t take problems to the top until they reach critical mass.

Once you’ve spotted the pain, what’s next?
First, identify and pull together people to discuss the fine details of the problem. You don’t need to connect all the dots, just get a solid understanding. Develop a game plan that focuses on the most painful areas that, if resolved, can produce the biggest gain.
Many companies put together a laundry list, and then don’t move forward, fearing the cost and scope. However, if you prioritize the most critical items, you might be able to resolve the few problems that are causing most of the pain.
Then, reach out to a provider with the skills and abilities, as well as the offerings, to help you overcome your top challenges. It’s important for all parties to keep the larger list in mind because it could affect the software solution decision. Each resolution is a piece of the puzzle, and you want to avoid having to revisit it later once you’ve moved on.

Curtis Verhoff is a systems integrations and applications manager at Blue Technologies. Reach him at (216) 271-4800, ext. 2251 or [email protected]

Save the date: Discover how your office technology can connect your business at our Aug. 20 Synergy Showcase. Meet us at the Q to see for yourself. Visit http://bit.ly/12PbQOd for details.

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How cybersecurity is becoming a priority for private companies

Pervez Delawalla, President and CEO, Net2EZ

Pervez Delawalla, President and CEO, Net2EZ

The executive order released Feb. 12, 2013, by the White House on improving critical infrastructure in many ways confirms cyberattacks have become a serious threat to national security.

While the order’s focus is on protecting critical infrastructure, such as power grids and hospitals, private sector companies also should take cyberattacks seriously.

“Business owners will lock their cars and protect their homes in sophisticated ways but won’t protect the most critical area, which is where their data sits,” says Pervez Delawalla, president and CEO of Net2EZ. “Because it’s not happening in front of us, but in the cyberworld, many tend to not pay attention.”

Smart Business spoke with Delawalla about cybersecurity, the threats that exist and how companies can protect themselves.

What are the threats?

The biggest threat facing our digital information is foreign governments trying to penetrate our systems for intelligence from which economic value can be gained. A great deal of proprietary information, such as designs and ideas for new products, is being stored on company servers. If that information were extracted, it could offer a competitive advantage.

The common thought used to be that a cyberattack would result in a company’s website going down. A hacker looking to make a name for him or herself would attack a site by bombarding it with bogus traffic, and it would cease to function. Now, hackers are looking to stay behind the scenes because the data they gain can be a lot more valuable than shutting down a site.

What could be the extent of the damage?

In extreme cases, a data breach could trigger the complete downfall of a company. Depending on the nature of the attack, a breach could cause customers to lose trust in the company and its brands. That’s in extreme cases. In other instances, valuable intellectual property could be lost and the associated R&D investment would be hard to recoup.

How can a company recognize its exposure to cyberthreats?

Many times exposures come from within the company, so it’s important to understand what employees are working on and who has access to what data.
Also, consider the risk when an executive travels overseas. When using his or her smartphone, it’s possible software can be downloaded on the phone without his or her knowledge. When that person comes back and connects to his or her office network, the software that was downloaded could penetrate into his or her network.
 
What are some critical components of good cybersecurity?

It’s important to establish layers of protection. For example, set criteria for employees to access certain company information on its servers. Similarly, companies should employ hardware in layers in order to protect critical data. There are hardware devices designed specifically to stop distributed denial-of-service attacks.
Intrusion protection systems can detect when someone penetrates a company’s network and identify who, where and how. Firewalls also are useful to block unwanted traffic, but have them periodically audited to ensure their effectiveness.

It’s important to have all of these systems audited. Too often companies set up these systems and forget about them until something bad happens.
Regarding mobile security, executives traveling overseas should take a conventional cellphone. Another option would be to back up the data on your smartphone before the trip, use the phone overseas, and then wipe the entire phone before connecting to any of your home networks again.

Who can help put a solid cybersecurity plan in place?

There are professionals who have expertise specifically in cybersecurity. Companies in some cases are adding chief security officers to work alongside chief technology officers. However, if a company is not large enough to appoint someone to such a position, then the best option is to work with a consultant who is focused on the security side or a company that provides cybersecurity services on an ongoing basis.

Pervez Delawalla is president and CEO at Net2EZ. Reach him at (310) 426-6700 or [email protected]

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Managed IT services that deliver ROI

Zach Schuler, founder and CEO, Cal Net Technology Group

Zach Schuler, founder and CEO, Cal Net Technology Group

Over the past few years, the term “managed services” has become more prevalent in the IT services community. It’s how many companies these days are consuming IT services, especially companies without the need or the budget for a full-time IT department. In its most basic sense, managed service delivery is the utilization of remote tools in which an IT service company can remotely manage and support a client’s IT environment.

These tools allow the remote monitoring, patching, upgrading and support of a client’s servers, workstations, and network devices. These services are usually priced on a “per device or user/per month” model, with the idea that a network can be maintained for a “fixed fee” per month.

“There are distinct advantages to this IT service delivery model, both to the IT company as well as to the client,” says Zack Schuler, founder and CEO of Cal Net Technology Group. “First, from the IT company’s perspective, they can automate most of the routine tasks that are associated with maintaining a computing environment. These remote management tools have many automated processes that can be turned on, thus saving the IT company time and money.”

Smart Business spoke to Schuler about how to get the most from managed IT services.

How do businesses benefit from managed services?

First, this service delivery model helps clients manage their IT budgets a bit more closely, as many of the services are delivered on a fixed fee. This adds predictability to the ongoing cost of IT. Next, if the IT company has perfected its own processes around these tools, the ‘human error’ factor of manual maintenance goes away.

With all of the benefits to managed services, if a company looks at it as its only answer to IT services, it is doing itself a huge disservice. While managed services might be the answer to basic maintenance of the system, it neglects helping companies to truly drive value out of their IT resources. Managed services, when pitched as the solution, put consumers in a highly commoditized mindset. IT services should not be viewed as commodity services since, if delivered correctly, they can add serious bottom line advantages to the business.

How can businesses ensure these services are effective?

A less known term in the industry is ‘blended services.’ Blended services are a strategic combination of managed services and professional services that are packaged together to deliver the ultimate amount of value to the customer. This consists of looking hard at those services that can take advantage of remote tool sets and automation, and subsequently injecting intellectual capital into every other facet of IT that cannot be automated.

Part of blended services consist of pre-scheduled on-site consulting time. The face-to-face interaction that occurs during this time is invaluable to the business. It is during this time that questions like, ‘What is the best way to do such and such on my computer?’ or ‘What application can solve this business process issue that we have?’ are more likely to get answered. It is this face-to-face interaction that leads to new efficiencies being discovered, and people at the company ultimately being more productive.

If services are delivered 100 percent remotely, the chances are slim that a person will pick up the phone and call a relative stranger to ask about the best way to do something.

How can executives be sure they derive value from managed services?

They need to see the value in IT and its effectiveness as a bottom line tool. Too many executives at companies have traditionally been ‘technophobes’ and view IT strictly as overhead, a necessary evil, as opposed to a bottom-line boosting critical part of the business. In short, when consuming IT services, make sure that you are as equally engaged as your service provider.

Make sure that you see past the commoditized services being sold to you, and that you ask your IT company to do more and to prove its real value. Assuming you are paired up with the right organization, they will help you take your company to the next level. This might cost more in the very short run, but in the not too distant future, the ROI will be there.

Zack Schuler is the founder and CEO of Cal Net Technology Group. Reach him at [email protected]

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How to understand and use cloud technology to improve your business

Eric Folkman, Manager, managed services, Blue Technologies

Eric Folkman, Manager, managed services, Blue Technologies

Cloud computing is the use of applications that are housed on servers outside of a business’s location and accessed using the Internet. Instead of deploying servers internally and building a network infrastructure within their walls, companies contract with a cloud-computing provider that hosts the applications.

“Cloud computing is a key component of any company’s infrastructure these days, whether you’re Fortune 500 or a sole proprietorship,” says Eric Folkman, manager of managed services at Blue Technologies. “There’s a piece of it now that can fit pretty much any company. It wasn’t that way a few years ago, but the technology has progressed and the costs have come down so far that there’s something there for everybody.”

Smart Business spoke with Folkman about getting started with cloud computing.

Why should you look into utilizing the cloud to help your company?

Three simple reasons are:

  • Financial benefits.
  • Increased availability of data, whether for your employees or the public.
  • Reducing your disaster risk with some form of backup.

What specifically can be taken to the cloud?

The ability to move applications to the cloud has exploded. It may sound cliché, but the better question might be: What can’t you take to the cloud?

Some applications are better than others in the cloud environment, such as email, financial systems, customer relationship management (CRM) systems, data backup and Microsoft Office-type products like Word and Excel. In addition, voice is gaining popularity, which works by routing your phones through the Internet. This can reduce your business phone bills and provide flexibility to telecom costs.

When is the right time to go to the cloud?

It depends on the situation, but anytime a company is considering a major change to its technology — whether a server upgrade or application change — that’s an appropriate time to consider the cloud.

Here’s a scenario I run across three or four times a week: A company is running an older, internal email server and decides to upgrade. It could spend tens of thousands of dollars on hardware, software licensing and implementation. The business gets an upgraded server but still has maintenance costs, security risks and the potential for downtime if something happens to the physical servers.

The alternative is to host email through the cloud. There’s no need to secure and maintain an internal server, and email is more accessible via the Internet. There’s also no disaster recovery component — you know the provider has mechanisms to keep your data safe. However, sometimes you have so many users going to the cloud that it doesn’t make sense, as opposed to doing it in-house, from a cost perspective.

What’s an easy way to get started?

Cloud-based data backup is a low-cost, low-risk way for a company to dip its toe in the water. Companies see savings quickly and don’t have to mess with tapes and the risk of someone (usually the receptionist) manually rotating tapes off-site. Although there are some configuration changes, it’s not a mission-critical application.

Email and a CRM, like salesforce.com, are two others to consider doing sooner rather than later with a quick payback.

How is the value of cloud usage measured?

Like any business process, do your homework and build a business case. Not every company is perfect for it, but it’s an option executives should at least look at. It can be difficult and cumbersome to figure out if you’re not familiar with IT and don’t understand all the pros and cons of the cloud environment. A little advice in the beginning could really help get you beyond the learning curve.

Once you’re using the cloud, many providers offer advanced reporting and monitoring tools, so if something goes wrong you can take corrective action. For instance, most backup providers offer a dashboard. You can see how many computers are backing up, how much from each, how long it takes, how many failed to back up, etc. You also want your cloud contracts to include flexibility to add services or make changes as needed.

Eric Folkman is manager of managed services at Blue Technologies. Reach him at (216) 271-4800 or [email protected]

Blue Technologies offers further insight on this and other topics affecting businesses on its blog. Learn more by visiting www.btohio.com/news-resources.

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How centralized data centers can decrease costs and improve enterprise efficiency

Pervez Delawalla, President and CEO, Net2EZ

Pervez Delawalla, President and CEO, Net2EZ

Businesses with multiple locations or branches, in many cases, are not leveraging computer network efficiencies by taking advantage of existing technologies to limit equipment deployment and enhance cost efficiencies.

“Branch offices are too often set up with unique data centers instead of having centrally located servers,” says Pervez Delawalla, president and CEO of Net2EZ.

Deploying a great deal of equipment at each office diminishes the computing power of servers at the individual branches.

“Their capacity isn’t being utilized completely at a branch and is unavailable enterprise-wide,” he says.

Smart Business spoke with Delawalla about leveraging data centers for maximum efficiency in cost and use.

What are some keys to centralizing a data source?

One important element is connectivity. If an enterprise sits in a major metropolitan area, then connectivity infrastructure should be reliable and readily available. However, when outsourcing to a data center, the connectivity piece is the least of a company’s challenges because data centers offer higher-capacity connections through multiple technologies, such as Multiprotocol Label Switching, point-to-point connection or bandwidth compression. This enables an enterprise to limit the amount of equipment it needs to deploy.

In what way does connectivity affect a business?

How a company sets itself up to utilize a data center hinges in part on the number of user accounts at that location. A smaller office with 10 or fewer employees could be well served by multiple 10-megabit connections that link to centralized hardware at a data center. Consider using an authentication server at each location. Employees log in through this server so passwords and usernames don’t travel outside of the building. Once a user is authenticated, he or she has access to all of the company’s data, enterprise-wide, housed in the data center.

Bandwidth capacity can always be added through a local provider as a company grows. From a technology perspective, it’s simply an upgrade to the connection and not a deployment of new equipment. Operationally, it amounts to simplifying that connection so it’s easier to support, monitor and track. The increased capacity of that connection helps facilitate the centralization of hardware, which allows the hardware burden to be decreased.

What savings can be realized through centralizing hardware?

A multi-branch enterprise is often using applications that are common across offices. Centralizing those common applications in a data center helps improve application management, which eliminates the need to employ IT personnel at individual locations because support can be provided at one site. It also means not having to deploy multiple servers for multiple sites, so cost savings can be realized by not buying as many server boxes.

Maintenance and upgrades also are made easier with a central data center because those don’t need to be accomplished on an individual basis. And if a security patch comes in it can be handled from one location. Further, having fewer servers means purchasing fewer licenses for software. Updates become easier, and license fees are less of an expense because software doesn’t have to be deployed in all locations.

However, just because hardware is centralized doesn’t mean everything is housed on a single server. The number of physical servers needed depends on capacity and redundancy needs of the company.

What can companies expect after centralizing their hardware?

The main benefits of centralizing are that the efficiency for support to the end user improves, deployment of upgrades becomes simpler and cost savings can be realized from reducing physical hardware. Having centrally located hardware also provides better security, management and handling of company assets. Security is improved because hardware can be physically monitored from a single location and server access can be better controlled. With less equipment to manage, limiting access becomes easier, meaning there’s less chance a costly mistake is made.

Pervez Delawalla is president and CEO at Net2EZ. Reach him at (310) 426-6700 or [email protected]

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How to determine what parts of your business can and should be moved to the cloud

Zach Schuler, founder and CEO, Cal Net Technology Group

Zach Schuler, founder and CEO, Cal Net Technology Group

“Not a day goes by where I don’t read a headline talking about ‘the cloud,’” says Zack Schuler, founder and CEO of Cal Net Technology Group. “The current, overused definition of the cloud is ‘anything that happens on the Web,’ but in the business world, the more accurate definition of cloud computing is leveraging someone else’s hardware/software and services to complete a business task.”

Smart Business spoke with Schuler about the role that cloud computing has played for businesses during the past two decades, and in what ways it can benefit their operations today and in the future.

How are companies using cloud computing?

When I started Cal Net Technology Group 15 years ago, we didn’t host our own email server. We used an outside company (Earthlink) to host our email, which, in essence, meant that Earthlink was providing ‘cloud services’ for us.

We also have been using an online payroll service for eight years now, whereby we enter our payroll data into a website, and our employee paychecks are processed. Many other businesses might be doing the same. This is truly a ‘cloud service’ that has been around for close to a decade.

Some companies use an Internet-based product called Postini, which has been around since 1999, to scrub their email for spam. I bring this up to point out that all of us have been leveraging the cloud for quite some time, and we probably didn’t even think about it; in actuality, it really isn’t a very new phenomenon.

What are some examples of how businesses can move functions to the cloud?

There is a definite shift in moving some computing resources into another company’s data center in order to save you some headaches and, in some cases, time and money. I use the word some with emphasis here, because if you think that your entire business is moving to the cloud anytime soon, you are probably mistaken — unless your business consists of only a handful of computer users.

The most prominent shift to cloud computing is the migration of email back into the hands of hosted providers, similar to how it was 15 years ago. Microsoft is now in the hosting business with its Office 365 product. It consists of Microsoft Exchange (email server), SharePoint (an intranet product), and Microsoft Lync (instant messaging) in the cloud, with the ability to ‘rent’ Microsoft Office on a per-user, per-month basis, with Office still being installed locally on your desktop.

In moving from an on-premise email solution, such as Microsoft’s Exchange Server, over to Exchange Online, the migration has been very time-consuming, and thus very costly. These migrations have proven to be more costly than moving from one on-premise solution to another. That being said, there can be some significant savings in hardware and software costs, reducing capital expenditure spending for many companies. Additionally, after the solution is running, the ongoing maintenance of on-premise solutions will be gone, which should equate to a cost savings in the long run.

Google has made a significant impact in cloud computing with Google Apps software. From what I’ve seen of the software, it is a good solution for individual use, and for the use of ‘micro-businesses,’ but it reminds me of Office 95 from a functionality standpoint. So, I couldn’t recommend this to any business that relies heavily on word processing.

Perhaps the most successful case study, and a company that has truly made its mark by delivering software over the Internet, is Salesforce.com. It has a very robust feature set within its application, and it was remarkable what it was able to do early on in the cloud-based customer relationship management space.

There are some other line-of-business applications that are cloud-based, as well, and truly deliver a rich user experience, but these are few and far between today, but will be the norm in the next five years.

How can businesses determine what to take to the cloud?

The wise approach is to hire an IT firm with expertise in this area to evaluate your systems, determine the applications that may be ready for the cloud and take a hard look at the overall ROI in moving them.

Zack Schuler is founder and CEO of Cal Net Technology Group. Reach him at [email protected]

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