Friday, October 23, 2009

Where's the Cost in Business Software?

Software has several cost centers, each of which will be explored below.

Licensing
Unless you plan on pirating the software (bad idea!) then you need software licenses. When buying more than 5 licenses, it's a good idea to look into volume licensing deals.

Many small businesses tend to just make due with whatever software came with the computer. This is fine in the beginning when you are trying to control costs, but eventually you will want to standardize your business on a uniform collection of software tools for all your employees. That way you know that every computer has the same basic tool set for your workers.


Training
In all my experience, I have never recommended that a company cut their training budgets. Usually it's the exact opposite. Too many companies don't spend any money training their employees. That is sad because most software has incredible capabilities that no one is using.


For example, I dramatically improved the efficiency of one customer's accounting department with 3 classes on Microsoft Excel. Suddenly, the accounting team was creating pivot tables (see picture), graphs and writing their own macros.


Upgrades
There are 2 kinds of upgrades you need to keep in mind: hardware and software.

In order to use some software, you will need to make sure that your equipment is up to spec. That means spending some money bringing your computers up to speed.

Software upgrades are how you keep up-to-date with the latest versions of your product. Upgrades are typically less expensive than purchasing the full version of the software. You need to budget ahead for software upgrades because eventually you will need to adapt to new development in technology.


Conclusion
Software is an important part of your business technology. As you grow, you will want to standardize all your computers on the same software. Make sure to budget for your employees to receive training in order to maximize the value of your software. Finally, plan ahead for upgrades so you can stay current and competitive.



--------------------

Read more! Choose from the rest of my "Where's the Cost In...?" series:



R-Squared Computing - Business Technology Experts