Technology Spending Lessons for Better Return on Investment for RIAs

Noted author and tech prophet Stewart Brand once said, “Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road.” Companies that are looking to be a part of the steamroller understand that one of the best ways to manage growing IT costs is to partner with a managed services provider (MSP).

Experts predict that the global technology industry will hit $5 trillion this year. To say that technology is advancing at a breakneck pace is an understatement. Let’s just look at some stats that provide credence to this statement:

  • In 1971 less than 10,000 transistors fit into a microprocessor; today it’s over 10 billion
  • There are over 1.3 million tech start-ups
  • In the next year, artificial intelligence (AI) augmentation is expected to free up 6.2 billion hours of worker productivity
  • Globally, internet users spend nearly an average of 7 hours per day online

In such a rapidly evolving environment, having an outsourced partner that can help take the mystery out of tech, improve business productivity, and save your organization money in the process is the right move. In particular, registered investment advisors (RIAs) are a business model that benefits greatly from sound technological investment strategies.

What Is Total Cost of Ownership?

Gartner defines total cost of ownership (TCO) as “a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time.” For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses.”

In IT, TCO can vary greatly from the original price tag of the technological product, particularly when ongoing maintenance costs and future upgrades are factored in. It’s important for an organization to have a true sense of the TCO for technological acquisitions, and the right outsourced IT services partner can provide this complete picture.

Don’t Be The Car on the Side of the Freeway

Don’t be the car on the side of the freeway.

How so, you ask? Just this morning I took my car in for a windshield replacement, and I figured I would ask for a once-over while the car was in for service. They called back advising that “This needs to be done at some point; your brakes are starting to show signs of wear.” To me, this really illustrated the contrast between hourly IT service providers and the MSP model. With the former arrangement, you may be completely in the dark on the state of your car until it dies while driving through the mountains, because the engine should have been replaced 60,000 miles ago. But who knew?

Anyone who has ever experienced the inherent dangers that a mountain-drive breakdown presents (as well as the high expense) can appreciate how valuable a proactive approach to maintenance can be. Which is where an MSP provides a true competitive advantage by being intricately involved in your full IT health picture as opposed to being brought in simply to problem-solve once disaster strikes. Not only is this approach the best one from a risk mitigation perspective, but it can also help your organization avoid the hefty price tags that accompany IT disasters. RIA’s are custodians of such precious client data that they especially need to be proactive in their approach to cybersecurity. They need IT solutions that are strategic, not merely tactical.

Don’t be the car on the side of the freeway.

‘The Big Game’ Is a Prime Example of Business Productivity

itSynergy has been the MSP for the Arizona Super Bowl Host Committee for the last 2 times that the Super Bowl has been held in Arizona. In between Arizona-hosted championships, things are quiet for the host committee. But then the lead-up to “the big game” happens.

Three months before the final event, the Arizona Super Bowl Host Committee organization scales up from one person to 150 people. Then, a month post-Super Bowl, they are back down to 10 people, and then a month later, back down to 1. Here’s a perfect example of an organization that goes from nothing to massive to nothing within the space of 12 months. It’s crazy and a fun ride, and since we’re with them on that ride, we’re able to help them ensure they are scaling up (and back down) as securely and cost-effectively as possible.

Truly a touchdown as far as scalability and business productivity go.

Technology Budgeting Missteps

A prime misstep that I see time and time again is under-utilization of technology that companies are already paying for. For example, an organization may buy a Microsoft 365 license, and that includes email, SharePoint, Teams, and forms. It includes a ton of tools, but they’re using it solely for email. It’s like buying a whole bag of groceries, but just using one thing. Something we see regularly is where nobody is actively managing Microsoft licensing, which leads to licenses just sitting out there unallocated, which is the equivalent of throwing away money. Food for thought for those number-crunchers who are tasked with ensuring their technology dollars are spent pragmatically, yet with the highest return on investment (ROI) possible.

CapEx (capital expenditures) vs. OpEx (operating expenditures) is another financial quandary that organizations struggle with. It is a whole lot easier to ride out things, like say a global pandemic, with a more manageable monthly fee as opposed to a major lump-sum investment.

IT solutions can give RIAs a great competitive advantage in driving growth, improving productivity, and ensuring compliance in their heavily regulated field. RIAs also need to ensure that they are properly investing in cybersecurity given the stringent compliance regulations they are subjected to. Furthermore, brand trust can make or break an RIA business, so they require the utmost security to ensure against potential reputational damage.

Taking a Strategic Approach to Technology

Since 1997, itSynergy has taken a strategic approach to technology and IT solutions. We keep our clients’ organizational goals and long-term planning top of mind, helping them to strategically leverage their technology as an asset to drive growth. Along with Arizona businesses, we also help RIAs put their technology funds in the right places, making sure they’re getting the most out of their technology. Reach out today to learn more about how itSynergy can help you use technology strategically for better ROI.

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