Is $50K A Lot Of Money

ROI of Investment

Let me start by saying that $50K is just an arbitrary number I chose for this discussion. It’s not based on anything specific—just the simplicity of a round number. Now, is $50K a lot of money for a business? The answer varies wildly depending on who you ask, their personal financial situation, the size of their business, and their role within the organization.

For a small business with a couple of employees, $50K could be a daunting amount of money from an expense perspective. Conversely, the same $50K might be insignificant for a company with 5,000 employees spread across the globe. So, the bottom line is that costs are relative to the conditions and environment of the payer.

Now, imagine that this $50K expense was for an office building. Unlikely, I know, but stay with me for the sake of discussion. This would likely be seen as an incredible value—a bargain, really. But what if this office was in the middle of nowhere, forcing your employees to drive an hour each way every day? Suddenly, that $50K office building loses its luster when you realize you can’t attract a great workforce willing to commute that far.

What if the $50K was to invest in infrastructure that allowed your operations to become more efficient, generating an additional $500K in profit each year? I’d wager it would be a no-brainer for almost anyone signing that check.

The point I’m making is that costs and expenses are not linear when it comes to business operations. They’re completely relative to the needs and benefits associated with the expense.

How Does This Apply To Technology?

When it comes to technology expenses, we often see organizations evaluating costs in a linear fashion. As the old saying goes, they’re stepping over dollars to pick up pennies. You see, with any business expense, you should always look at the return and the ultimate value you could get out of the investment. Because technology can be complex, and most business owners don’t spend all their spare time reading up on the latest technologies, they operate based on assumptions. Assumptions like “All we really need is…”, “It shouldn’t cost that much…”, and “We are currently only paying X”. Unfortunately, in many of these conversations, there’s no curiosity about whether there’s a value that far exceeds the expense. You simply cannot base what you should be paying for something on what you’re currently paying, UNLESS you’re already getting the value you think you deserve for that exchange.

Many of these conversations start with complaints like, “We are not happy at all with our current IT services provider. They take days or weeks to get back to us, they’re rude to our team, they have recurring issues that never seem to get fixed, and they provide no strategic guidance.” But then, in the next breath, the comment is, “Well, we don’t want to spend more than X because that’s what we are currently spending.” I’m from the South, and we have a saying for that: “That dog won’t hunt.” You are getting exactly the results you’re paying for. If you’re happy with that result, then great—it’s a fair trade. If you aren’t happy, then the price cannot be your deciding factor.

The IT services industry today has such a wide disparity, and it’s tough to understand what’s different between providers, what technology you really need and could benefit from, and what should guide your decisions. This is especially true when it comes to cybersecurity, since most of the value of cybersecurity protection is in never having to worry about it. Many organizations say, “We don’t really need that,” regarding cybersecurity protections. My question to them is always: How do you know? Would you base your livelihood on that assumption if you had to give an answer right now? Whether you realize it or not, you are rolling the dice without even knowing it if that’s your thought process.

The Bottom Line 

The bottom line in all of this discussion is that as business owners and leaders, you have a responsibility to make the best choices for the livelihood of your team and operations. When it comes to technology decisions (and all business decisions, for that matter), invest time in truly understanding the value differentiation between different providers and solutions. Base your decisions on what drives the most value and ROI for you. Yes, technology should drive a tangible ROI, and if your provider isn’t helping you see that, it’s a good sign you don’t have the right partner.

If you don’t value the potential that technology has to drive exponential ROI for your organization, then it makes sense to base your decisions on the lowest price. There are plenty of providers out there who will cater to this desire. They use the cheapest tools and solutions available, hire the least expensive labor, and lack the financial ability to invest in new technologies and innovations. As a result, their service matches this mindset—but if you’re okay with that, then it’s a good fit for you.

However, if you want a different result, significant returns on your investment in technology, and a partner that puts your organization ahead of the industry and your competitors… there are a few of us out there. Spend the time to learn how you can achieve that ROI.