The IT Industry in the Wake of Supply Chain and Inflation
The IT industry is a rapidly growing sector that has been affected by the supply chain and inflation in recent years. The rise in prices of raw materials and components has forced companies to increase the prices of their products, which has hurt the industry. In this article, we will discuss the effects of the supply chain and inflation on the IT industry. We will also provide solutions to help businesses overcome these challenges.
The supply chain is a network of suppliers, manufacturers, and distributors that work together to produce and deliver products. The supply chain is an important part of the IT industry because it provides the raw materials and components needed to produce servers and computers. In recent years, the cost of raw materials and components has increased dramatically, which has not been a good thing for IT companies and customers alike. The price of servers has increased by 20% since 2017, and the price of computers has increased by 15%. This increase in prices has made it difficult for businesses to purchase new servers and computers.
Inflation is another challenge that businesses in the IT industry face. Inflation is a measure of how much prices have increased over time. When inflation goes up, businesses have to pay more for the same products and services. Inflation has been a problem in the IT industry for several years. In February inflation has risen to its highest rate since 1982. This rise in inflation has made it difficult for businesses to purchase new servers and computers.
Most small businesses on a strict refresh schedule for hardware have been forced to push back expenditures like this because of the factors mentioned above. It does not have to be that way though. Businesses should be able to work with their IT company to come up with a way to keep moving forward. Whether that means maintaining the hardware they have for longer or finding creative ways to reduce costs.
Leasing Hardware
As a leader in the IT industry in the St. Louis area, Ardent has found multiple ways companies can combat the current economic climate. One solution is to lease servers and computers instead of purchasing them outright. By using these solutions, businesses can continue to grow despite the challenges posed by the supply chain and inflation. Depending on your business accounting practices you may find leasing more beneficial than buying. Often the cost of leasing is tax-deductible, and it offers businesses more flexible payment plans.
Move to the Cloud
Another way to reduce costs is to switch to cloud-based services, which can be more cost-effective in the long run. We discussed the benefits of using a cloud-based storage solution in a previous blog, but we give you a quick run down here as well. Moving to the cloud not only has cost benefits it also has some technical benefits such as an improved capacity for remote workers, improved backup and recovery options, reduced downtime, and increased scalability.
Plan Ahead
Even if your business has the capital to withstand price increases on hardware due to inflation, plan. Work with your IT company to plan 6 months out on what you believe you many want to upgrade. Lead times on hardware are not fast in today’s climate. Planning ahead can ensure that you have what you need when you need it, whether that is your computer refresh or new network equipment.
Maintain Your Current Equipment
The final way we recommend our clients reduce costs in the current economic client is to sign up for one of our monthly support plans to extend the refresh cycle on your current equipment. Computers and servers are just like cars. They need constant preventative maintenance, or they will have issues. You wouldn’t leave your car with the oil not changed, would you? Well, computers and servers are the same way they need updates to software and protection from viruses.
Still, having trouble deciding what is right for your business? Our team of highly trained and experienced IT professionals can help. We have been helping clients navigate through the technical and fiscal challenges of the IT world for many years. Reach out today and start the discussion on how Ardent can help your business!