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Where to spend spare cash – it’s an age-old question for business owners and senior executives. Which functions should they invest in to get the biggest bang for their buck? It’s a debate in which they overlook IT at their peril.

It’s all too easy to assume that not spending on technology will save money but as the saying goes, prevention is better than cure. Labouring on with outdated solutions just leads to problems further down the line. It can cost your business dearly, while also putting a mental drain on your staff and holding them back from working on profitable projects.

You wouldn’t keep using an old pair of running shoes with a worn-out sole, would you? Well, the same applies to your organisation’s technology.

Older tech needs more maintenance, updates, patches and licensing fees, to keep it secure and compatible with newer systems. This can cost significant amounts of money, while taking up the time and resource of the IT team. Estimates put the cost of maintaining existing IT systems at around 75% of the average IT budget.

Below are just a few of the ways in which ageing technology can be a cost to your business:

Data loss 

Not updating your systems puts your company at risk of data loss, as they’re likely to crash, or fail altogether. And the older they get, the more frequent – and more severe – data losses can become.

This can lead to downtime, not to mention the resource taken up on the labour-intensive tasks of re-entering data. Plus, unrecoverable customer data could lead to lost relationships.

Data theft 

Data loss due to system failure is one problem but data theft is another risk altogether.

In today’s heightened cyber-crime environment, not updating your IT systems is like inviting criminals to target your system. And data breaches can be hugely costly – in financial, reputational and regulatory terms. The EU’s GDPR data protection legislation allows for fines of €20 million or 4% of global turnover (whichever is higher).

Operational headaches

Outdated systems are inefficient to run. They’re slow and require repetitive, manual processes that modern technology eliminates.

As a result, there are significant cost savings to be had by upgrading them. Data entry costs can be reduced by up to 75% by automation solutions – and who wants to spend their time on manual data input anyway? Fresh business process designs  can also bring  costs down by as much as 20%.

Meanwhile, freeing up your employees to focus on higher-value business activities can enhance productivity by 6%.

Frustrated staff and customers

Slowing down your employees – and the customers they serve – isn’t just inefficient. It will also cause frustration and dissatisfaction. So using outmoded technology runs the risk of the nightmare scenario for a business: losing customers and talent.

It also risks removing your competitive edge, if rivals are offering customers a slicker experience. Microsoft found more than 90% of consumers would consider taking their business elsewhere, rather than doing businesses with a company that has outdated technology.

The case is clear. Modernising your technology may require some upfront investment. But not doing so is a false economy, which could end up costing your business thousands. Don’t let outdated systems be a financial drain on your business.