Everyone running a business knows the joys of creating and managing a budget. In this article, we hope to provide some tips and guidance for planning your technology budget. The goal for a technology budget is to determine how much it will cost your business to operate, maintain, and replace the mission critical hardware and software used.

Best Practice #1 - A Critical Business Computer's Lifecycle End with the Warranty

Let's day we purchase a brand-new Dell computer for the front desk with a 3-year hardware warranty at a cost of approximately $1,500. The plan will then be to replace this machine at the end of warranty with the newer model. It is recommended that you begin reserving $42 per month so that you have $1,512 available to purchase the replacement machine when that warranty expires in three years. Under normal conditions, it is unlikely that you will have unexpected replacement or hardware costs for your up front desk computer.

Best Practice #2 - Maintain Active Software Support on Mission Critical Business Applications

Software support is basically a warranty for your software. Your business operations probably depend heavily on at least two pieces of software. Support for these pieces of software should be an included cost in your budget. This software requires occasional updates and patches as well as a team of technicians who can help identify and resolve issues when they occur.

You should always make sure that your software is vendor-supported and upgrade when necessary to the latest supported version of your software. For example, only the current and last version of the Medisoft are supported by eMDs. Each year when the new version is released, the version released two versions prior is no longer supported by developers at eMDs. This means that no security patches or updates will be released for older versions of the software, which leaves your business open to HIPAA fines for being negligent in maintaining electronic patient health information.

Best Practice #3 - Annual Upgrades in November for Medisoft Software

Your software vendor can provide you with different options as well as strategies for upgrading the software in the most cost-effective way possible. Some software is already sold in an annual or monthly fee, which includes your upgrades. This is easy to calculate and work into your budget.

For example, for Medisoft users, we offer annual support agreements that provide 1 year of support from Accudata at the lowest fixed cost. Also, our savvy, "in-the-know" clients have figured out that it is least expensive to upgrade annually during presale. This is because there is typically a big discount available from the vendor for preorders and the upgrade cost from the previous version is already significantly lower. Last year- in November - clients who upgraded from V21 to V22 saved approximately 77% off the cost of MSRP. We must also plan to upgrade, on average, every three years at a minimum due to government regulatory changes. For Medisoft users, it is approximately 3.6 times more expensive to upgrade from a version that is two years old. That means you could upgrade every year and pay 1.8 times less than if you just paid every other year for your upgrade. Not to mention, you are missing out on the benefits of a new version every other year.

Based on pricing and discounts from eMDs for Medisoft Network Professional V21 and V22, users who upgrade annually will need to reserve approximately $70 per month, for 12 months from December to November to purchase their software. Users who upgrade every other year will need to reserve approximately $128 per month for 24 months to purchase their upgrade. For those who are going to try to stretch it to the three-year-required-upgrade mark will need to save approximately $100 per month for 36 months to purchase their upgrade at full price.

At the very least, you should try to get these numbers for your software and create a plan for how often you will upgrade and what the cost will be from year-to-year.

Best Practice #4 - Outsource Hardware Support to a Local Vendor

From a budgeting standpoint, this is very similar to software support in that you can operate efficiently with a fixed monthly cost assigned to hardware support services. to best understand the benefits of outsourcing your hardware support, we will take a look at two common alternatives and some of the issues that come along with these solutions.

The first scenario is handling hardware support yourself. While it is not impossible, the reality is that, unless you make money by supporting technology, then it is unlikely that you will prioritize network maintenance over things that actually generate revenue. You and your staff will then inevitably deal with performance-killing, preventable issues until one day the issue will become a show-stopper. At that point, you will face an unplanned, high, per-hour labor cost for a technician to resolve the issue. This option provides technical support with an unplanned cost factor that also negatively impacts revenue generation.

The other alternative is to hire a full-time technician to work in your office. The fully-burdened cost of this employee makes this the least cost-effective solution. At this high cost, you are only provided a single technician for approximately eight hours per day. You will also have to purchase and maintain support agreements for your antivirus and backup software, along with any other tools needed by the technician to maintain your network. We have many offices who employ technicians, however they still outsourse the monitoring, backup, and antivirus to us. This allows the investment in an employee with strong technical skills to be used to customize and operate their software as a systems administrator, rather than spending all of their time making sure that each machine is updating and addressing small, but time-consuming issues that could be sent to Accudata to be addressed. This option provides the fastest response to technical support issues at a cost that is four to eight times higher than outsourcing.

Outsourcing to a local technology company - let's say Accudata (wink wink) - will allow you to have multiple technicians available to your company at a fraction of the cost. We will provide antivirus, monitoring, and backup software as part of our agreement with your office - which would all be implemented and maintained by our technicians. If one of our techs needs a day off, you still have three others standing by, ready to respond to any issues that may be holding you back from doing what you do to generate cash flow. This is the recommended option because you get a high level of technical support at a low fixed cost, with a very accommodating response time.