Sunday, May 20, 2012

IT Cost-Cutting in SMEs

Ok, calculators out and do the math. I am about to show you (those who don't buy pirated software) how to save your company thousands of dollars in software, hardware and maintenance costs. I have always been a staunch advocate of Open Source and free software. This ideology promotes development and improvement in a piece of software, equipment or machinery. In application to business and in this context software for business Open Source will be more than likely in reference to Software and to a lesser extent Hardware applications.

For Business use nowadays there is an almost unavoidable dependence on hardware and software to improve productivity and streamline various activities relevant to your business. This is where software comes in and a huge deal can be saved here. Depending on the nature of your business these saving will vary. I will make an attempt to outline where these savings can be realized.

Operating System
We are all aware by now that when it comes to Operating Systems (OS) the leading or de facto operating system for years has been Microsoft Windows in its various incarnations. The success of Microsoft Windows can be likened to a company selling less than average products but because that company has the market flooded with both it might (in various areas) and products leaves the consumer with no immediate option but to go with the product which is hardly ideal. I have used every incarnation of this OS since 3.1 and I must say it is a bit useful, my favourite version and the one I considered most stable and useful is Windows XP. As useful as using a bread knife to cut meat - it gets the job done but is far from ideal. Microsoft in the past has been found guilty of using unethical practices to get its OS sold or shipped with new computers and this leaves the end user with no immediate alternative. My colleague and associate pointed out one observation he made that is, Acceptable Windows versions alternate - Windows 3.0 was good, 3.1 was mediocre, 95 was good, 98 mediocre 98 SE good, ME - Utter Rubbish, XP good etc. This has led us to conclude that apparently Microsoft releases an OS as a beta or test version of the subsequent ine, ME was beta for XP, the numerous error reports sent to the company from various crashes and complaints that the user experiences are akin to a test version being improved upon by the reports received from its beta testers. Beta testers that pay significant sums to sign up to test Microsoft's OS's.

Here is a scenario: A user running a small business needs at least 5 computers for various applications, in order to work each computer needs an OS to work the cost:

Operating System
Microsoft Windows 7 (1 computer ) - $64 to $180.
Microsoft Windows 7 (3 computers ) - $390 to $450
and the cost increases per computer by about $40.

Office Suite
Microsoft Office 2010 Home and Business - $141 to $343
and the price varies upwards for every computer you add.

Accounting and Bookkeeping Software
Now almost everything is being done on or by computers regardless of how old fashioned you may be it is far from convenient to do you bookkeeping on paper therefore Software is the obvious option. Below are a few of the more popular ones.

Bookkeeper - $39.95
Sage Peachtree Complete Accounting - $199.95
QuickBooks Pro - $183.96
DacEasy - $2,299.99 and yes that is United States dollars!
NetSuite Small Business - $1,188

It is ironic that these bits of software are "designed" for small business use and the prices are so high and remember each price shown is for a single computer. Nowadays installing such software on just one computer in the business makes no sense as small business at times have multiple tasks to accomplish and a bottleneck would be created if one were to wait to use the only computer on the office that the software is installed on, what the customers think?

So, the cost we are looking at for five computers is:
Microsoft Windows 7 - $470
Microsoft Office - $301
Quickbooks Pro - $919
Total: $1,690

The math was done in my head and this is a basic estimate, much in the same way I would purchase this software (if I was inexplicably stricken by lunacy).

So, we are looking at a cost of $1,600 for 5 computers for a small business set up, that works out to $139,000 in Jamaican currency at an 87:1 exchange rate.

Big Time Savings
Now, let me show you how you can eliminate such expenditure something every single entrepreneur should be interested in.

Operating System
Cut the Windows crap, save yourself at least $64 up to as much as $470 on Operating system alone. I'm unable to try anything else and I am hooked and I can't break away from the Windows cult I was forced to become a part of against my will might be a few of the complaints and the inability of many people to move out of their comfort zones may be valid points but "you'll never know if you don't go." There are numerous OS alternatives to Windows out there and let me enlighten you:
1. Ubuntu
2. Debian
3. Gentoo
4. Knoppix
5. Thousands of others

The weird thing about most of these is they are free, installation however, varies from uber-easy to "ultra-techie-challenge" hard. My suggestion; do some research and see which one best suits your need. I can vouch for Ubuntu, Fedora, Debian, Gentoo and Puppy Linux, those are flavours I've tried and they are all nice, easy to install and have loads of support all free from a very very vast varying and dedicated community! Your best most gentle bet is getting Ubuntu for starters, there is no limit to the amount of computers you can install it on therefore no limit to the amount of money you can save.

Office Suite
You can save another $300 in this category by ditching Microsoft Office and going for either Open Office or Libre Office both of which come with Ubuntu (Open Office in versions before 11.04 and Libre Office in the ones afterwards). This is a complete office suite with Database, Spreadsheet, Presentation and even drawing applications all for free. None come with mail and/or newsreader applications, however the linux distribution (distro) you choose would more than likely have it already installed.

Accounting and Bookkeeping Software
This is a rather challenging category I haven't really had the opportunity to test fully, I've never really had the need to try any of the proprietary options as the marketing Strategy of these companies is not the same as Microsoft in muscling out the competition, what is admirable about these is they adopt a true marketing strategy to sell their product - they compete with price, features and user friendliness. There are open source versions of Accounting software available for all Linux distros, one that is worthy of mention that is great is Apache OFBiz. It does what the very expensive software tools do yet it is free!

Ubuntu and many other distros has a software centre that comes in very handy in in installing various pieces of software for varying tasks, from desktop publishing to GIS etc. Go ahead give Linux and open source a try and you will happy you made the switch.