Making IT an investment, not an expense
A short overview of how to make sure every pound you spend on IT generates a return, before the full breakdown below.
IT: an investment or expense?
The definition is clear-cut: an investment is spending that creates an asset and improves profits, while an expense is an operational cost. IT was traditionally viewed as an operational cost, but that perception has changed dramatically as businesses’ reliance on technology has grown. You can no longer operate without IT, it’s now critical to communication, client engagement, service delivery and competitive differentiation.
However, investing in IT doesn’t automatically translate to a profitable outcome. Without careful consideration, IT spending quickly becomes an expense rather than an investment. The right advice and guidance is essential to ensure your IT investments generate ROI and boost profits.
Technology partnership, guiding your investment
Outsourcing IT can be an affordable way to keep your business running smoothly, but finding the right provider is challenging. You want expert advice on what’s actually necessary, from a provider with your best interests at heart.
Unfortunately, as the IT support industry has become more profitable (attracting Private Equity investment), some providers put sales ahead of service and try to sell products you don’t need. To avoid this, find a provider who takes the time to understand your organisation and develop a long-term plan, not a quick sale. A true technology partner who shares your goals makes all the difference to reliable, cost-effective IT. Here are our tips to keep IT spend an investment, never an expense.
Look at what you already have
Before investing in new technology, make the most of what you have. Cloud productivity suites like Microsoft 365 and Google Workspace are everywhere, yet people overlook the range of apps available in their current licences (or a minor upgrade). Intranets, external collaboration folders, HR systems, employee satisfaction surveys and booking systems can all be fulfilled by Microsoft 365, companies often buy these separately before realising they already had them. You’ll find more examples in number 5 of our list of 14 examples of how to reduce your business costs.
Look for ROI
Technology serves a purpose, streamlining processes, automating manual work, speeding up communication, or keeping the business operational. These are measurable in productivity and therefore employee cost. Run a Return on Investment (ROI) calculation before any technology purchase: if it’s not generating ROI or untapped revenue, it’s probably not an investment.
The outlier is cyber security, where the impact of not having protection is hypothetical, but you can run the numbers on downtime or reputational damage, and measure it ongoing by reporting on threats stopped.
Look to integrate and automate
Integrating and automating processes boosts productivity and reduces frustration. Many systems offer prebuilt integrations, click-to-call between phones and CRMs, shared contact directories, stock and billing platforms, marketing-to-sales integration, and data analysis into backend databases. Even simple single sign-on lets employees use one login across all apps. Automation is also straightforward for device builds: a new employee logs into a new machine and all the software, controls and settings for their role install automatically, saving time and install costs, and improving their first impression.
Look for OpEx, not CapEx
Most companies don’t have the budget or cash flow for major one-off expenses. Fortunately, most SaaS and technology services now offer monthly billing, minimal upfront cost, manageable ongoing expense, and categorised as operating expenses (with tax benefits). Most IT providers offer managed services monthly; it’s also worth considering leasing hardware, especially for a large server project or laptop refresh. Leasing companies add a small markup over 36 months, but the tax benefits often outweigh it, and since IT equipment typically lasts ~36 months, many clients lease and replace at the end of each term, keeping operating costs stable and technology current.
Look for off-the-shelf software
When choosing applications, favour ‘off the shelf’ solutions from reputable providers already used in your industry. Custom-made solutions sound attractive, but consider the future: will they keep meeting your changing needs? Who supports them long-term? What are they built on, and will it become unsupported? We’ve seen companies build processes around legacy apps only to find them unsupported, facing big costs to keep them running or to switch. Cloud SaaS like Salesforce, HubSpot or Xero is the smart choice for most: best-in-class processes pre-built, ongoing upgrades, and integration with Microsoft 365, Google and phone systems.
Look for strategic decision-making
It’s increasingly common for quarterly IT reviews to focus on pushing new products rather than your actual needs. That’s why account management should be led by a technical advisor who understands your business and proposes valuable improvements, not just more services.
Avoid being pushed into unnecessary purchases at quarterly meetings. We run this with every partner: a full re-assessment of your IT environment against best practice, a review of the last six months’ tickets and health reporting, a stakeholder questionnaire on tech issues and requirements, and a discussion focused solely on next year’s strategy, compiled into a roadmap of objectives, projects and investments. It quickly reveals whether your account manager can engage strategically rather than just sell.
Look at your IT reports
To know your past technology investments are still worthwhile, you should receive reports on their success and impact. A good IT support provider handles this for you. At Sereno we compile everything into a centralised reporting system partners can review (most don’t, and that’s fine, it’s our responsibility), then present the key takeaways to act on at quarterly reviews, so you can be confident previous investments remain effective.
Look for fully managed IT
Many providers offer a “managed” service covering all aspects of IT, installing and updating antivirus, resolving issues, for a small fee, instead of you buying a licence and spending internal staff time. It may seem more expensive, but weigh the cost of internal staff time and whether they can manage it effectively. Providers also have integrations to deploy software and alert on issues. The main benefit: you can relax knowing professionals handle everything under one roof, just ask for a report on the services provided.
Look to one provider
It’s actually less risky to put all your IT in the hands of one provider (with proper due diligence). The IT environment has many parts, internet, network, phones, devices, cyber security, web hosting, domains, software, email, servers. Splitting these across providers feels like diversifying risk, but it’s the opposite, especially without a full-time in-house IT manager. Outsourcing should take the burden off your employees, which means your provider needs visibility and control across everything. Providers often bundle services for superior, holistic delivery, our Cyber Security Packages combine services from multiple vendors (device, email, employee), giving cost savings through buying power, best-in-class products, and engineers who know how to manage them.
Look for Sereno
Technology should serve as an enabler for your business, not a hindrance.
At Sereno we understand the challenges of technology investment, which is why we prioritise our partners’ needs and ensure every IT spend is a strategic investment. If you’re ready to make smart investments in technology, contact one of our knowledgeable advisors on 0203 089 01 41 or hello@serenoit.co.uk to learn how we can help transform your business.
From Sereno IT
The Sereno IT team
Sereno IT is a London-based managed IT support provider helping businesses across the UK stay secure and productive. Read more in the IT Strategy section.
