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Happy Thanksgiving - and yes we do have some things to be thankful for!
Greetings!
With all the hoopla about bailouts and executive compensation, I think that it's important for those of us stuck here on Main Street to get our side of the street clean! This means finding better ways to run our information infrastructure more effectively and using all of the available means to help pay for them. This month, I selected two articles that I think are worthwhile reading. The first will help you think about what you should be doing to run your information technology and the second you should run by your accountant to see if it makes sense to help you pay for it!
From the families of Prime Telecommunications, we wish you and your families a Happy Thanksgiving!
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7 Lessons That SMBs Can Learn from Big IT
By David Strom , PC
World , 11/13/2008
Just because you don't have a large enterprise doesn't
mean you can't run your IT operation like the big guys. Here are seven ways to
help your SMB implement some of the lessons big IT operations have learned over
the years. Using these tips, you should be able to improve productivity, cut costs, and keep your business running
smoothly.
1. Standardize on
Desktops and Cell Phones to Reduce Support Differences
This is not as easy as
it sounds, because even if you buy multiple quantities of the same exact model
of PC, the systems could still have subtle internal differences that can come
back to haunt you when you have to fix them. Carey Holzman, an independent
reseller based in Glendale, Arizona, ran into this problem. His company ordered
a particular model of computer that contained specific parts meeting the
corporation's strict requirements. Yet when he received the PCs, he found that
the systems contained two revisions of the ATI video card, one of which caused
an incompatibility with the mice the company used.
And unfortunately for
Holzman, the PC vendor was of little help. "The vendor refused to
acknowledge any responsibility for the video card incompatibility. We started
ordering the computers without video cards after that--until the next problem
cropped up, and eventually, [we] switched vendors entirely," he says.
To keep
incompatibilities to a minimum, you should try to stock hard drives from the
same vendor, and to standardize on the same model of peripherals such as
printers, mice, and keyboards, too. You can also make use of Windows Inspection
Toolkit or similar utilities to keep track of the specific
configuration of your systems. Finally, use drive imaging software such as Acronis True Image or Norton Ghost to make copies of your basic
system installation, so that it can be recovered easily in case of virus
infections or other problems.
Many IT shops also buy
spare PCs and use them for replacements. "The problem is that you are
tempted to use it as new workstation, instead of as a replacement, and then you
no longer have a spare," says Holzman. "You need to put it in the
closet and use it only to help you through temporary IT emergencies."
Besides keeping several spare PCs, it's also a good idea stock a spare laser
printer and network hub in case yours go south.
Holzman also recommends
retainer support contracts with a local technician, so you won't have to
scrutinize the invoices trying to interpret the work that was done and whether
the tech was being fair and honest.
2. Perform Off-Site
Backups
Small businesses have
basically two approaches to choose from in doing backups: One is to copy
critical data to a series of external hard drives and periodically rotate them
from your office to a remote location (such as a bank safe deposit box). The
other is to use one of a number of online backup service providers such as Box.net, Symantec Online Backup, Carbonite, or Mozy that offer low cost gigabyte-level
storage. Big IT typically uses off-site tape storage because of the quantity of
the data involved, but for smaller outfits, online services are less expensive
and more convenient.
The trick with either
method is to use them religiously, and to ensure that all of your data is
copied on a regular basis. The online backup option could be especially handy
in more than one way: Earlier this summer, Damian Zikakis, a Michigan-based
headhunter, had his laptop stolen when someone broke into his offices. He
replaced it a few days later; and because he had used Mozy, he thought that he
was covered in terms of being able to bring back his files from the Internet
backup.
When Zikakis had a
moment to examine the layout of his new machine, he "found several
incriminating files. The individuals who had my computer did not realize that
the Mozy client was installed and running in the background. They had also used
PhotoBooth to take pictures of themselves and had downloaded a cell phone bill
that had their name on it," he says.
Zikakis did a bit of
head hunting on his own and contacted the appropriate police department with
this information. They were able to recover his computer, and now have the task
of figuring out who actually took the laptop originally and what law
enforcement options to pursue.
3. Use Hardware to
Secure Your Internet Connection
SMBs often are not as attentive to the security of their
Internet connection as they should be, and the results of such
neglect could be disastrous. Last year, hackers compromised the point of sale
system (POS) of clothing designer firm Nanette Lepore. The hackers managed to
reconfigure the outdated firewalls and sold some stolen credit card numbers
from the company's high-end clientele.
This happened because
the company's chain of retail stores had little or no security measures or
proper procedures. "All of our store clerks were using the same password
to access the POS," says Jose Cruz, Nanette Lepore's network manager.
"It was wide open. No one had ever thought to change passwords
periodically, or even use different ones for each user. Prior to my arrival
here, the emphasis on POS security wasn't urgent. Needless to say, this all
changed."
Cruz got a call that no
one ever wants to receive--from the FBI, telling him that several of their
customers had received fraudulent credit card charges. This led to finding out
that the company's Netopia DSL routers had been hacked, and their firmware had
been changed to allow hackers inside their network.
The stores now use SonicWall integrated security devices, and Cruz
has implemented password change policies and other security procedures to
ensure that he won't get a repeat of what happened before. Such an approach can
help an SMB keep private information secure. Another good policy: Ensure that
all network access is turned off when an employee leaves the company.
4. Use a VPN
Many larger IT shops
make use of virtual private networks (VPNs) to ensure that their communications
are kept confidential, and that traveling users can access home office files
and other resources when on the road. Many of these VPN products can be quite expensive,
but the SMB alternatives don't have to cost a lot of money.
Some, such as Openvpn.org, are
free, while low-cost VPN service providers such as LogMeIn.com's Hamachi can run about $50 per person per
year. "Hamachi allows us to connect to hundreds of our customers and
monitor live videos of our security cameras discreetly and without having to
worry about being compromised by unauthorized users," says Ben Molloy, the
vice president of Pro-Vigil, a San Antonio, Texas-based company that provides
security for off-hours construction sites.
And VPNs come integrated
in a variety of lower-cost security gateway appliances, too. Nanette Lepore
makes use of the SSL VPNs that are included in the SonicWall appliances to
connect their stores together, and to ensure that no one can compromise their
communications.
The Lepore firm even set
up temporary accounts for guest workers and maintenance personnel that are purposely
time-limited. Granting accounts for temporary personnel without such time
limits is another common mistake. Time-limited accounts mean that the IT staff
doesn't have to remember to remove the account when the maintenance is
completed.
5. Run Personal
Firewalls, Especially on Windows PCs
Windows is notorious for
being a security sinkhole, and most larger IT operations now require their PCs
to run some kind of personal firewall to prevent infections and malware from
taking over. A wide range of products is available, but the key is to pick one,
make it standard, and make sure that all employees are educated about why it is
necessary to keep the firewall running at all times, especially when traveling.
Inexpensive but effective firewalls include AVG from Grisoft.com, Online Armour, and Kaspersky Labs.
However, you can't
always manage each individual machine, and a careless user could turn off these
defenses and let viruses in. This is where having a drive image copy can come
in handy.
Another way to enforce
security policies and other protective measures is to deploy some endpoint
security tool that will block unhealthy PCs from gaining network access. Napera is one product that is specifically
targeted at SMB installations, and McAfee and Sophos have others.
Matt Stevenson, who is
the director of information technology for Talyst, a pharmacy automation vendor
in Bellevue, Washington, has been using the $3500 Napera appliance on his
120-node network for the past six months. "A lot of our staff is out in
the field, and they attach to a wide variety of networks. When they come back to
our office, the Napera box forces their PCs to become compliant and to ensure
that our network won't get infected," he says.
6. Rely on VoIP PBX for
Your Phone System
As more and more big IT
shops can attest, using a VoIP PBX telephone system has tremendous cost
advantages. The biggest one is for your remote workers who can have
extensions on your headquarters' phone system. These systems are also very
flexible in terms of call handling, and offer other features such as call
forwarding, multiple simultaneous rings (where an incoming call can be answered
wherever it is more convenient), so-called follow-me (where incoming calls are
routed to particular numbers at particular times of the day), and
do-not-disturb.
"Now businesses are
able to get features that can set the rules on how they are contacted, and be
able to conduct more business when they aren't in their office," says
Henry Kaestner, the founder and CEO of Internet phone provider Bandwidth.com,
one of the many vendors that offer this kind of service. SNETis another company
that offers an affordable VoIP PBX.
These systems start at
around $400 a month and have the advantage of being able to grow or contract
with your staffing needs. They also can present your company as more
professional, with features that are normally found on very expensive phone
systems. The downside is that you need to ensure that your network is up to
snuff to handle all the voice traffic; and to get the most out of these
systems, you'll want to find a VAR or consultant who specializes in VoIP PBX
installations.
7. Have a Solid Test
Plan for Adding New Technology
The big guys don't put
some new tech into their operations without first doing a lot of testing first.
Put together a test lab or designate one office that will be your "beta
bar," and encourage your most technical staffer to try out new things
before getting them deployed.
Ramon Ray, the owner of
the site Smallbiztechnology,
advises that in addition to testing, it's important to analyze a variety of
options. "Just don't just go for the first choice, but think and review
the pros and cons and what else is available to you. During the testing, it is
also important to consider your future needs. Many smaller businesses don't
think of their future growth, which will affect their IT plans," he says.
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Economic stimulus for small businesses
Little known Economic
Stimulus Act 2008 can save you bundles.
Small Business Tech By James E. Gaskin , Network World , 11/13/2008
Remember back in 2005 when the government provided tax
incentives for businesses, known as the "write off your SUV" act? The
deal applied to the purchase of all business equipment, but the special SUV
writeoffs got the headlines. Many jumped into that, although record oil prices
must have made some SUV buyers wish the incentives were for a Prius. Now the
deal is back, but few people have noticed.
The magic words in accountant-ese are "bonus depreciation
allowance" and "qualified section 179 property." Bottom line, and we're
definitely talking the real bottom line, is that you can write off up to 100%
of the first $250,000 of capital expenditures if purchased and put into service
within the 2008 calendar year. This business information was all overwhelmed by
the news stories about the $300 checks mailed to taxpayers.
Chris Carcia, principal and partner at Avidiant Consulting Group,
told me, "It's amazing how many people aren't aware of this. A few of our
clients are, but the majority have no clue." Part of the reason people didn't
notice is that the "write off your SUV" program from 2005 was discontinued in
2006 and 2007. Now it's back, and not many people realize it.
Chris Griffith, CEO of StarPoint Technologies does realize this, and it was his e-mail blast
to customers in the Dallas area that got my attention. Griffith credits his new
focus on the Economic Stimulus Act with reviving multiple customer deals.
"The Act applies only to
hardware and software, not services," said Griffith. "A real estate firm is
looking at a project worth about $100,000. Probably $80,000 will be hardware
and software that qualifies. They'll be able to write off all that $80,000 in
2008 rather than spreading the depreciation over fives years."
StarPoint has a link on their Web site to the IRS pages explaining how this all works. Using the IRS
examples on applying the 50% bonus depreciation, StarPoint explains how to
spend $400,000 and write off $304,000 the first year. That's a lot of taxes not
paid, meaning more money stays in your pocket.
One of Garcia's consulting customers is about to receive funding
to build three organic fish farms. The vendors are primed and ready to deliver
the equipment as soon as funding arrives. Between the three farms, the company
should save about $300,000, out of between $1.5 million to $3 million total
equipment costs.
$800,000 seems to be the magic number," said Garcia. "The rules
are easy to follow for accountants. Get the special reduction allowance form
4562-FY from the IRS."
The IRS says "the $250,000 amount provided under the new law is
reduced if the cost of all section 179 property placed in service by the
taxpayer during the tax year exceeds $800,000." I doubt any business that calls
itself a small business will spend more than $800,000 on capital goods in one
year. If so, consider yourself a medium business.
Both gentlemen agreed that small business owners will almost
always miss this kind of tax incentive if not told by their accountant. Tax
professionals get volumes of tax changes every year full of information like
this, but rarely are programs worth so much money up front.
Like to lease? This does apply to leases that transfer the
equipment to the owner at the end of the lease. Your typical "fair market
value" lease won't qualify. If you want to lease something soon, talk to your
leasing agent about this to get your best deal.
The customer response to Griffith and StarPoint have been
strong, as surprised business owners and managers had no clue about this Act.
"I got about eight calls the first day after the e-mail," said Griffith.
"Nobody had any idea about this depreciation bonus."
While I'm talking here about technology, hardware and software,
most other capital goods fit the bill. Machinery, office equipment, signs, and
most other real property will qualify. Just about anything you can touch,
except the people doing consulting, installation, and configuration services,
will meet the criteria.
Griffith has another company ready to move to take the tax
savings. "One company with about 100 users will now move up a project worth
$25,000 to $30,000 to finish in 2008 rather than pushing it off until next
year. They should be able to write off over $20,000 of hardware and software
immediately rather than over five years."
Sorry, but the SUV expense limit remains at $25,000. But with
the market the way it is, an SUV that was $40,000 in April may now be $25,000.
SUV dealers would love to talk to you. Trucks and vans get the special bonus
depreciation for the first $11,160 spent. Buy an SUV, buy a truck, or buy some
computers and software. Any way you do it, save some taxes.
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Featured Article
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