In a previous blog this month, we talked about planning your IT budget and investments for 2022. In this blog, we will dig a little deeper into why businesses should expect, and budget for, increased IT costs in 2022.
The last two years have required businesses to rethink and change the way they do business. From remote work to everything digital, the changes made by businesses have leveraged technology. The result is that the technology organizations thought of as “nice to have” are now a “need to have” to operate a business properly and securely.
Let’s go through the main reasons that IT operations will cost more in 2022.
Cybercriminals are enjoying great success these days. They are taking advantage of the fact that many businesses had to quickly adopt new technologies to accommodate remote work and digital transformation initiatives to continue to operate during the early days of the pandemic. Often, security was not top of mind. This created a perfect storm for cybercriminals. While organizations were focused on getting their businesses operational and productive, the criminals focused on ways to maximize the damage they could cause and the financial benefits they could reap. Targeted ransomware attacks, embedded malicious code in innocent looking emails, and cloud attacks were just some of the tactics used by the cybercriminals.
The new technologies implemented and the new remote or hybrid work environments require new security tools, with new processes and procedures and management of all of it. Again, just as the new technologies were “must haves” to continue to operate, improving and maintaining security around both your new and legacy technology is a requirement to continue your business operations.
Additionally, investing in securing the IT environment of the business not only protects your company but it also improves the risk profile when applying for cyber insurance which again, is a must have to protect your business.
2. Scarce IT Resources
In the months leading up to the pandemic, we were already seeing delays in equipment delivery due to a shortage of semi-conductor chips. This shortage was exacerbated by the pandemic with many manufacturers in lockdown for months. Add to this transportation disruptions, higher shipping and delivery costs and continued worker shortages in all areas of the supply-chain. The result is higher prices for any new or replacement equipment. At this point, we don’t really know when this situation will stabilize but we expect the situation to continue for at least another 12 to 18 months.
The other scarcity that is being experienced in many industries and very acutely in the IT space is human resources. Businesses will have to pay more to attract, retain and reward good IT resources as well as investing in automation of certain tasks which will add up to increased IT costs.
3. More Complex IT Environment to Manage
All the tools and applications that were implemented to ensure remote work was possible i.e. collaboration, communication, VoIP and many others, need to be properly configured, integrated, monitored, secured and of course managed. Plus, the infrastructure is now no longer centralized but distributed under multiple roofs. This all adds up to more complex environments and maintaining these environments to ensure productivity may add additional IT costs.
4. Cloud Services Cost Increases
In our previous blog, we mentioned that fact that Microsoft will be increasing their prices for Microsoft 365 as of March 1, 2022. Many other cloud applications will follow suit if they haven’t already done so.
In addition, cloud adoption has increased in a pretty dramatic fashion over the past two years. The access anytime, anywhere ability of the cloud has definitely helped businesses stay operational and productive throughout the pandemic. However, optimization and proper management of cloud workloads is critical, and the associated costs should be considered within the IT budget for 2022.
5. Technical Debt
Technical debt can be defined as the under investment in critical IT infrastructure and applications. Every business has some technical debt. During the pandemic the focus has been on transforming businesses quickly rather than on focusing on correcting the technologies already in the IT environment. It only makes sense that the technical debt probably has increased during that time. It should be noted, that the more technical debt a business accrues, the less resilient and the higher the cost of running the IT environment will be.
Paying down some of the technical debt in a planned and controlled way in 2022 and beyond will help businesses reduce the security, operational, opportunity, and financial risks associated with aging technology.
None of the above-mentioned reasons, as to why your IT will cost more to run in 2022, can be avoided. However, planning and budgeting will help your business be more secure, more productive and more agile.
MicroAge can help guide your budgeting process to maximize your IT investment. Contact us today.