Today’s IT Situation at SMBs – We need to change!

Running an IT system on premises is much more complex today than it was only ten years ago. It will be even more difficult in terms of money and manpower to run a streamlined IT on premises in another ten years. If you are a CEO, you need to understand the challenges your CIO has.

Cloud was not really an issue in 2011, when I became the CIO of an SMB with about 500 employees worldwide. Some were talking about it, but it seemed far away. Our ERP system, Infor LN, was not available in the Cloud at that time. Everyone in the company, including myself, was more than reluctant to look at Cloud solutions at all. They were considered inherently unsafe; the information was thought to be prone to data theft by literally anyone; nothing to think about. Investing in hard- and software was out of question.

Hardware / Systems

I composed an IT strategy for the next five years. We needed to strengthen and improve our infrastructure, to support our subsidiaries all over the world, and improve our ERP system to make it ready for international usage. At that time, many of our servers were still physical machines, dedicated to certain services or systems (file server, ERP server, Exchange…you name them). Occasionally, we had to face considerable downtime because of hardware problems.

To eliminate downtimes, implementing VMware virtualization was the next logical step. We had to install highly capable ESX servers, as well as add a highly capable storage system. We built a second data center to give us redundancy. The data centers were equipped with UPS systems as well as automatic fire extinguishing systems.

We looked at the storage situation and found that the industry rule of thumb—that growth of data in is roughly 25% to 30% per year—was true for us as well (we actually had 31% growth over the last 20 years). That means you must triple your necessary disk space roughly every five years.

To make a long story short, let me point out a couple of other things we had to look at as well:

  • Virtualization is both a blessing and curse: because it is so easy to install a virtual server, the growth rate of these servers is considerable. You need a new service? Set up a new server! Test system? No problem, you need one or two? The following chart shows the server development from the last 10 years of a typical SMB with today 500 employees worldwide.
  • How can you backup 30 TB of data? How many tapes do you need to store this amount of data? How much time does it take to write 30 TB to tape systems? We decided to implement three NetApp systems that are located in three different locations spread over the premises, a tape backup system that can manage this amount of data was financially out of reach.
  • We had to upgrade our internal network to 10 GB to allow our servers to communicate fast enough.
  • We had to replace our outdated phone system to a state-of-the-art VoIP system, now running on a virtual Microsoft Server.
  • We started to integrate our subsidiaries over the world into our Active Directory.
  • We had to catch up with Microsoft server systems and train our staff to handle new server systems, migrate from Windows Server 2008 to Windows Server 2012
  • The same was true for Active Directory, Microsoft SQL Server, Exchange Server, our ERP system, etc. Ongoing training is necessary.
  • There are many more systems we had to take care of: ECM, HR, CAD, time tracking, monitoring, anti-virus, firewall, PC deployment, etc.

Maintenance and Staff Considerations

My team has to deal with a rising number of systems every single year. Today we our IT administrators taking care of a remarkably complex IT infrastructure. We’re not only responsible for the infrastructure, such as servers, switches, storage etc., but we are also responsible for the systems that run on this infrastructure. If users have a problem accessing a certain system, they want a fast answer from our IT team. Autodesk Vault has a problem: ask IT!

How much training do you let your administrators have each year?

To sum it up: as technology moves forward, maintaining staff skills, both vertically and horizontally, is becoming more difficult for SMBs with limited resources. Many of my colleagues face the same: no budget for proper training to keep up with technology…let alone hire more specialists. On the contrary, many of my colleagues from other SMBs have had to reduce their IT staff.

Budget considerations

IT systems don’t last forever. We have clear rules in the form of a lifecycle management I introduced long ago: Servers will be used 5 to 6 years with 24/7 maintenance, switches up to 6 years etc. We maintain a list and plan our budget for necessary replacements based on that.

If business declines (and it does from time to time), IT investments have to be stretched, jeopardizing the stability and efficiency of our systems and, with that, the overall efficiency of our business.

This post is an excerpt from my document “Your Existing IT Strategy Won't Work” (2521 downloads) . Feel free to download it and get the full information.

Can you agree with my thoughts? I would love to see your comments on this article or reach out to me directly, using the contact form.

About Alexander

Alexander Buschek is passionate about Digital Transformation and the opportunities it gives businesses—especially MSEs. He is convinced that every business has to embrace Digital Transformation in one way or another in order to survive. The sooner a business begins its Digital Transformation, the better. Alexander was the CIO / CDO of Braunschweiger Flammenfilter and CIO of Cherry GmbH. Prior to that he was an entrepreneur, consulting MSEs about IT strategies, providing external project management, and overseeing various IT projects (e.g. ERP and CAD implementation and migration). Working with many MSEs gave him a deep understanding of this market. Alexander is now Senior Director, Analyst (MSE) at Gartner.