5 Problems That Small & Medium Businesses Deal With
One of the best ways to upgrade your IT systems is to know what problems your business is dealing with. Do any of these challenges sound familiar?
1. Relying on Aging IT Systems
Some government agencies, banks, airlines, and hospitals continue to use old software. One of the main reasons that they are reluctant to upgrade their IT infrastructure is that they do not want to affect the stability of their systems and databases.
Some small and medium-sized enterprises (SMEs) understandably drag their feet in upgrading outdated software. IT gives a business competitive advantages, but it also comes with a price tag.
Legacy software, which another term for outdated software that still meets business needs, is riddled with downsides.
These are some of the disadvantages of using old software:
Poor security
Outdated software is vulnerable to modern cyberattacks. Here's why:
- Old software may no longer receive security updates from its developers.
- Old software contain vulnerabilities that are known to hackers.
- Outdated servers attract more hackers because these servers are vulnerable and contain exploitable information like employee credentials and customer data.
There are ways to update business technology while keep costs manageable.
Business owners can prioritize the most critical software systems, be it their software for accounting, customer relationship management (CRM), enterprise resource planning (ERP), or servers. IT professionals will then modernize components of these systems incrementally, so that costs are spread over time.
Expensive maintenance
Legacy software is expensive to maintain.
In 2019, the US Federal Government spent 80% of its $90 billion IT budget on maintaining outdated software. Some of those systems are more than 50 years old.
Maintaining software, combined with the costs of upgrading, feels like a heavy burden to business owners who need to keep their IT spending in check.
But in the long run, businesses can save on costs by upgrading. Here's why:
SMEs often have to pay the same people who have been maintaining their code for years, at costs that are hard to negotiate.
The code base of legacy systems take longer to understand. If new people hop in to maintain old software, they will need to trudge a steep learning curve. This leads to more capital spent on paying human hours.
Old technology does not integrate with new technology. Businesses save on costs with software integration. With integration, SMEs do not need to build software from scratch each time they need new IT capabilities.
Slow business processes
Legacy software is not efficient at processing data. Instead of being a tool that speeds up a business, it can be a constraint that hinders workflows. Employees often use other software to supplement old applications that are not designed for modern use.
For example, an accounting software that does not integrate with cloud technologies can slow a company down.
Employees will first need to generate reports, email those reports, and hope that coworkers can find it in their inbox.
On the other hand, modern cloud-based accounting software allows employees to collaborate more efficiently. Everyone can access the same updated information (hint: data integrity) without the need for back-and-forth emailing.
Legacy technology can also be cumbersome to customers. If a business has an online customer portal that takes a few minutes to load, it can be frustrating for customers who are used to faster loading speeds.
What was considered fast 10 or 20 years ago can be frustrating now.
Can you upgrade old software without derailing business process?
There is a common misconception that modernizing software means jumping from outdated to cutting edge. Moving forward can be done in iterations. A custom software company can make incremental progress while ensuring that business goes on as usual (biz speak: business continuity).
2. Poor Backup Structures
What are critical business information?
Client information
Supplier information
Administration documents
Accounting data
Financial data
Tax data
Losing business data can lead to loss of revenue or doors being shut. Businesses need to proactively address data redundancy.
The 3-2-1 Backup Rule
There should be:
Three copies of your data: The original and two backups.
Two storage forms: The most commonly used storage media are hard drives and cloud storage.
One off-site copy: The off-site copy guards against fire, theft, natural disasters, and local power outages.
Cloud storage
Cloud storage is storing data in another location. Data is transferred to the storage location over the Internet. Google Cloud and Amazon Web Services (AWS) are leading cloud storage companies that offers an annual durability of 99.999999999%. If someone stores 10 million files on Google Cloud or AWS, they will lose only one file every 10,000 years.
RPO and RTO
In the event of a disaster, natural or technical, all the data from the last backup point to the time that disaster struck will be lost. This time frame between the last data backup and the point of disaster is called the recovery point objective (RPO).
Companies typically implement an RPO of 24 hours -- which means data is backed up daily. Modern backup technologies allow for data to be backed up every few minutes.
In the event of a data disaster, there is time needed to get back into normal operations. The time it takes to go from disaster to business-as-usual is called the recovery time objective (RTO). Depending on the backup strategy in place, an RTO can take anywhere from a few minutes to several days.
The right RPO and RTO strategies are the difference between a hiccup and a business disaster.
Who should back up the data?
Employee. Businesses that deal with a spreadsheet or two of data can give this task to their employees.
Software. Modern business software can be set up to automatically back up data.
Backup administrator. Businesses that deal with massive amounts of critical data assign a specialist who creates a backup strategy. This can be a full-time job or a part-time role performed by a developer.
3. Lack of Competent IT Personnel
A few years ago, Forbes reported the biggest reason why businesses cannot align their strategies with technological solutions:
The lack of IT Skills.
There are two main reasons for technical skills gap within organizations.
Some IT professionals cannot keep up with advancements in technology. This leads to businesses using outdated technology, which becomes less efficient and more vulnerable over time.
There is a greater demand for technical jobs than there are IT professionals. This causes businesses to be understaffed and employees over-strained.
Skills gap grinds innovation to a halt. It causes businesses to lag behind competitors who are better staffed.
There are a number of ways that businesses can address the skills gap in their organizations.
Continuous training
Paying employees to learn new skills can bring in benefits down the line. There are a number of small steps that businesses can start with:
Set measurable goals for what new skills employees should have in a given quarter.
Host regular training.
Cross-train employees for relevant skills.
Outsourcing
Staff augmentation is a way to quickly address skills gaps. In this model, a business hires employees from a software service provider to do any or all of the following:
- Kick-start a new project.
- Help an internal IT team maintain or upgrade software systems.
- Fill demands for specific skills, such as a programming language or business domain.
- Help complete time-critical projects.
Software companies offer different models for this type of outsourcing:
- Dedicated software development team. This team works solely on a client's projects throughout the term of the contract.
- On-demand software development team. This team works only for specified tasks or projects. The client is billed either by project or work hours.
4. Constantly Evolving Cybersecurity Threats
A 2020 report by Cisco revealed that more than 50 percent of small-to-medium businesses (SMBs) experienced some form of cybersecurity attack.
Malicious attacks continue to evolve, leading to cybersecurity fatigue. Businesses grow tired of proactively addressing security threats and become more vulnerable in the process.
2021 poses more new threats to businesses. Some of the leading security threats are:
Phishing: stealing user credentials to perform unauthorized account actions, such as purchases.
Cloud jacking: when a business' or individual's cloud account is taken over. This results to identity and data theft.
API breaches: an API is what allows different applications to work together. In integrated systems, software is only as secure as the API it uses. An infamous case of API breach happened when an API that payment platform Venmo was using was breached. This gave hackers access to transactions, along with personally identifiable information.
Ransomware: a type of software that locks users out of their computer. This form of malware shows a message demanding payment in exchange for giving access back to the rightful user.
Unwanted bots: automated computer scripts that access a website to find vulnerabilities or steal content (and publish those content elsewhere). These bots also increase server costs, since more traffic equals to higher operational costs.
Amazon Web Services (AWS) revealed that up to 51% of traffic leading to a website are from bots. Some of these bots, like Google's web crawlers, are designed for legitimate intents. Some are built for unethical purposes.
What can businesses do to keep their software and client information secure?
Train employees on security principles. The FCC has outlined 10 ways that businesses can internally manage their security.
Use updated software. Old software is no match to new attacks.
Implement a security architecture when updating or building software. A reliable developer or software partner will integrate security into the software development life cycle.
5. Using Software that Does Not Scale
Businesses need to meet growing market demands. Being able to scale means being able to actualize potentials for growth.
Scalability is often associated with the capacity to handle more users. This is just one aspect of scalability.
Load scalability: The ability of software to handle users from 500 to 500,000 and so on. The pandemic has highlighted the ability (or inability) of many businesses to scale, because of unprecedented online traffic.
Feature scalability: The ability to accommodate more features. Feature scalability requires code base that do not need to be changed drastically each time a new feature is added.
Maintenance scalability: How efficient is it to maintain software when it grows from 10 features to 50 features? How efficient is it to maintain and upgrade software when a new data center is added to the system?
Geographic scalability: Two servers in the same building can communicate quickly with each other. But what if a new server needs to be added in a different country or continent? Will a piece of software still perform well? This is when geographic scalability comes into play. Not all software systems are designed to function well across distances.
Another factor to consider when scaling is costs. Cost is not linear. Systems are that poorly designed from a scalability standpoint will suffer from overhead costs down the line.
Tech challenges are here to persist. But it is what drives businesses to innovate.
Does your business experience any of the problems listed above? Our Chief Technology Officer (CTO) can give you advice on how to implement solutions that will move your business forward.