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Businesses everywhere are feeling the budget crunch as our economy continues to struggle for recovery. Many organizations are moving to across the board cuts, requiring IT spending reduction. This reality is causing IT managers to ask the tough questions on how to deliver the same or better services at a lower cost.

The good news is that as technology has evolved, it has become less expensive. There are new business IT alternatives that can your organization substantially without reducing service or feature quality. I’ve outlined some specific options you can consider to add value to your business IT system while reducing your budget.

Spend less on equipment

• Instead of purchasing expensive business laptop or desktop computers, get your employees ‘netbooks’. Netbooks are small portable laptops that will run most standard office software and cost less than $300.
• If you have to buy classic computer equipment, focus on matching the need for performance with the computer you buy. Most users don’t need a fast processor and lots of RAM, and won’t need this for the foreseeable future.
• Don’t buy servers, use online software instead. Some specific examples are included below.

Consider replacing desktop/server software with online (web based) software.

• Replace your file server with a online storage product like box.net, which is a fraction of the cost of an onsite server.Instead of running an onsite Microsoft Exchange server, consider a hosted email service such as Gmail, Zimbra or HyperOffice. The average firm saves 70%.
• Use Quickbooks Online instead of the desktop edition. Pricing starts at free, and doesn’t require any servers, backups or complicated remote access tools.
• Replace Microsoft Office (which retails for $270 per PC) with OpenOffice, Google Docs, or Zoho. Most options are free or cost little.
• Replace expensive Customer Relationship Management (CRM) software (such as Seibel or SalesForce.com) with less expensive solutions such as SugarCRM.

Upgrades are an option, not a requirement

Most businesses have a 3 year replacement requirement on all hardware and software. The reality is that this often isn’t necessary or prudent for many businesses:

• Windows XP has worked fine for many businesses, and requires less resources than the newer versions.
• Hardware is now built better and lasts longer (a 5 year replacement cycle is now standard for many businesses).
• Applications that serve basic business needs can be used for a long time on a current version, or they can be moved to an online alternative.

Smart IT managers consider each service, the requirement of that service, then determine the required upgrade cycle. Across the board upgrades on a rigid timeframe cost more.

The bottom line is that by evaluating your requirements against new technology, you can save significant amounts. The traditional client/server computer setup of many businesses is being replaced by flexible online systems that cost less, are much more reliable, and can be scaled up and down as your business changes. Before spending, ask the tough questions and do some research, and you’ll fine that a better alternative awaits you.

Yes, the title means exactly what you read. Less technology is better for small business. Buying and maintaining servers, complicated networks, and worrying about security is expensive and can put a drag on your business. If you’ve had a bad experience with technology in your business, you’re not alone. A typical small business doesn’t have the necessary time and money to build a robust technology infrastructure. The result is a ill-maintained, often crash-prone software system that doesn’t work well and angers its users.

So what’s the solution? Getting rid of internal technology and subscribing to SaaS – or Software as a Service. It’s business software that’s delivered securely over a web browser. All you need is a simple laptop or desktop with an internet connection and a web browser. Tools like financial software, communication tools, project management apps, document management and retrieval are delivered seamlessly through the internet from a secure hosting facility. The tools that power most businesses can now be accessed securely from anywhere you have an internet connection. Because it’s delivered as a service, upgrades are free and included with the package. No more painful upgrades to the newest version that don’t load properly.

This trend is sweeping the industry. The model is built on monthly subscription fee for various tools, and these tools are stored securely in massive redundant data centers. This setup makes software extremely reliable and easy to access from anywhere. The Software as a Service (SaaS) market is forecast to grow to $19.1 billion in the next 3 years – at an annual growth rate of over 30%.

Right now the biggest concern for many businesses is that their information is stored with someone else. The reality is that the data centers used to deliver SaaS are compliant with stringent security standards, and information is vastly more secured than in your closet at work. Multi-site backup systems ensure that data is never lost. It allows even the smallest businesses to feel like a fortune 500 company with bullet proof software systems.

The best part about Software as a Service is price point. Because it’s delivered as a service IT becomes a fixed cost – no big surprises of having to buy a new server when the old one crashes. And for that matter you don’t have to invest $3000 in a server, just pay the monthly fee and have the whole thing taken care of. Most businesses start saving money the first month, and stack up savings as maintenance costs drop and productivity isn’t hindered by outages, backup loss, and configuration problems.

If you haven’t looked at SaaS, I’d recommend checking it out. Quickbooks now has an “online” edition, Exchange alternatives are delivered on the web. Many marketing, sales, and communication tools have web versions that are extremely robust. Overall the need for better tools that are more reliable will drive growth in SaaS in many small business, and maybe even yours.