Carey Balzer, an MSPmentor 250 member, is bringing order to Texas’s managed services market. As president of White Glove Technologies, an MSPmentor 100 company, Balzer has led a decade-long acquisition strategy. The result: White Glove now ranks among the top MSPs in Texas.

“I saw a very fragmented MSP market [a decade ago],” said Balzer. “There was no dominant force in Texas. Just a whole bunch of little folks.” Balzer saw this as an opportunity and began to move “little by little” from telecom to the IT services space before turning White Glove into a full IT service provider in 2008. Then he and the rest of the White Glove team started moving in on those little folks.

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On some computers with really large drives, the Recycle Bin’s default size setting (10% of your hard drive space) can be too much and may be an inefficient use of space. Over time, you may need to recover this extra space, and it’s easy to do so.

Just right-click on the Recycle Bin and move the slider to the left to reduce its allocated disk space. Click on OK, and you might be surprised at just how much space you were able to recover.

Cost savings are usually important to small businesses even in the best of times. New technology solutions may be necessary for survival and growth, however—and they may not be as expensive as you think when you consider their return on investment (ROI). In this four-part series, we’ll explain what ROI is, help you understand indirect ROI, and provide guidelines for predicting and measuring the ROI of a technology investment.

Part 4: Measuring ROI

If you’ve been following this series, you’ve already learned what ROI is and how you can use it to make sure your technology implementations are profitable. But the process doesn’t stop there: it’s important, once you’ve implemented a new technology solution, to track its benefits.

There are many direct and indirect benefits of implementing new technology, as we’ve described—but in most cases, companies don’t know what they are.

In many cases, what you measure is clear. Consider a service company that implements customer service software designed to help phone representatives more quickly resolve customer issues. To determine ROI, the company simply measures the number of calls per employee before and after implementing the software.

In other cases, companies don’t measure what we call the relevant “value drivers.” Some companies don’t know what to measure; others know what to measure but don’t know how to do it. The end result: only 17 percent of CFOs measure ROI for outsourcing projects, according to Hewitt Associates.

As an example of how this could happen, consider a manufacturing company that implements software designed to reduce errors in a product line, thereby improving quality. While the company may be tracking the increase in quality (in the form of fewer returned goods, for example), it may not be considering other value drivers. How about waste? We can assume that quality has improved, fewer products have been scrapped—but the company doesn’t have a business process in place that can track costs incurred from waste.

How do you identify value drivers? Follow the workflow. IT will always impact your business processes in some way. For example, it might eliminate, create, or change a business process. So to identify value drivers, look at the results you hope to achieve from these business process changes.

As an example, consider the service company we referenced previously. As a result of its new customer service software, the company might reduce its customer service employees from five to four. This change in business process shows that one value driver is the reduction in labor costs due to increased efficiency, resulting in a direct ROI. Another value driver might be improved customer service, resulting in an indirect ROI.

As another example, consider a company that implements software to track employee performance against objectives. In the past, it has paid bonuses randomly; now it has a methodology. This change in business process shows that one value driver is the savings in bonuses not paid due to non-performance, resulting in a direct ROI. Another value driver might be improved employee morale and effort, resulting in an indirect ROI.

Generally, a year of data collection should be sufficient to determine the changes in costs and revenues that will drive both direct and indirect ROI, providing you with solid data to determine just how effective your IT investment has been.

Many small and medium-sized businesses have the misconception that they are safe from cyber-attacks because of the lesser profits cyber-thieves can make from them. But recent studies show that hackers are now starting to exploit the less strict and intricate security protocols of SMBs.

There is a misconception among many SMBs that they are small targets for would-be cyber-attacks. “We’re too small a company to be of any worth” is the mindset of many. However, there is an ongoing trend in which smaller companies actually find themselves victims of the most elaborate and vicious cyber-attacks.

Why? Security experts are discovering that SMBs tend to have less or inferior security protocols in place to counter cyber-attacks. While this was of little consequence in the past, cyber criminals are now starting to take notice of the fact, and are exploiting it to their advantage. And it’s profitable too – an attack on one SMB might not amount to as much as a larger organization, but given the greater ease through which hackers can attack smaller businesses, they more than make up for the difference in the volume of companies they target. According to several news reports, these cyber-thieves can make off with as much as $70 million.

The more unfortunate fact is that smaller companies are less able to counteract the effects of losses from cyber-attacks. This is why you should stay one step ahead of cyber-thieves by updating your security systems. Short term or long term, it’s a practical solution to keep information and data safe, and your operations stable. Give us a call today – we can help.

Cost savings are usually important to small businesses even in the best of times. New technology solutions may be necessary for survival and growth, however—and they may not be as expensive as you think when you consider their return on investment (ROI). In this four-part series, we’ll explain what ROI is, help you understand indirect ROI, and provide guidelines for predicting and measuring the ROI of a technology investment.

Part 3: Predicting ROI

As we explained in part 2 of this series, you can’t measure ROI simply by asking what a technology implementation will do for your bottom line. However, if the new technology leads different parts of your company to collaborate, which in turn produces better goods and services that lead to top-line growth, then your ROI is likely strong. Getting at those indirect ROI numbers, however, may be the greatest challenge of ROI analysis. Few models exist to guide you, and with good reason: determining ROI involves looking at many components, then applying those components to your particular situation. But there are things you must take into account, from both a cost and a benefit perspective, when considering the ROI of a technology investment.

• Your existing technology infrastructure. There are few companies without existing technologies in place, and any new solution will need to work with these systems to be effective. There will likely be costs associated with the new technology’s impact on existing systems—but there will also be benefits. For example, a new technology might automate the tracking of hourly employees’ work hours. Or, it might offer more efficient collaboration.

• Your business processes. A new technology can clearly improve your business processes by reducing downtime, improving productivity, and lowering costs. But implementing the new technology will likely involve training staff in using the technology—and that can have associated costs.

• Your external relationships. Finally, no business is an island. Your systems may link to customer and vendor systems. As a result, any new technology may impose constraints on or require changes of external organizations or individuals—in the way information is delivered or received, for example.

To solve this puzzle, it can be helpful to ask three different but related questions about the technology solution’s direct and indirect costs as well as its efficiency.

• Direct costs: Can you afford the technology—and will it pay for itself? To answer these questions, you’ll need to know the cost of the solution itself and the monetary value of the resources used to implement it, measured in standard financial terms. You’ll then compare the dollar cost of all expenditures to the expected return in terms of the projected savings and revenue increases. You may need to project the cost and return over a multi-month or multi-year time span in order to show a payback period.

• Indirect costs: How much bang for your buck will you realize? Now the analysis becomes more complex. Analyzing the effectiveness of a technology solution requires you to look at its costs in relation to how effective it is at producing the desired results—in essence, to expand your measurement of ROI beyond cost savings and revenue increases to include performance relative to your company’s goals.

• Efficiency: Is this the most you can get for this much investment? Finally, you’ll want to ask whether the technology will produce the greatest possible value relative to its direct and indirect costs. That can present difficulties, as it will require you to conduct a similar analysis on many alternatives, perhaps simulating the performance of the alternatives in some way.

These three types of measurements differ in several ways. While the first is based simply on financial metrics, the second includes the quality of goods or services, customer satisfaction, employee morale, or in the case of some companies (such as manufacturers of “green” products or non-profits), social or political benefits. All of these measurements, however, will help you answer the same basic question: Which technology investments will pay off in the long term?

In the next part of this series, we offer specific tips for measuring ROI.