Lou and his brother Larry (real guys, different names) are two of the greatest penny-pinching business owners I know – and I’ve known them for going on twenty years. They run a small, 30-person company in Pennsylvania that manufactures custom industrial equipment for the food industry. The business was started by their grandfather after World War II and continues to be profitable today.

I call these guys penny-pinchers because they’re not cheapskates. They have money and they’ll spend it, as long as they see the value. I’ve always admired this about them. Their discipline and focus on keeping costs down is an enormous reason why they’ve kept their company going for so long. But sometimes they over-do it.

For example, both Lou and Larry have never been big believers in upgrading their technology. They have always subscribed to the “If it isn’t broke, then why fix it?” mentality. “Why should I upgrade my computers every other year?” Larry once said to me. “What? Because Microsoft tells me to do it? No way!” He always advised me to do the same: buy and hold your technology. Don’t buy-in to the always-have-to-upgrade theory that seems to drive the profits of hardware and software makers. For years I believed that advice. Until I realized that it was really dumb advice.

Why?

Technology is not like your typical asset. It’s under continuous change. You don’t just buy it and hold it. It has to be continuously upgraded and frequently replaced. If you don’t, then you and your business suffer – in these three ways.

Your Company’s Security Suffers

Look into any recent database hack and you’ll find a similar thread: Hackers like to find machines that are old. That’s because they’re running older operating systems that haven’t been updated with the latest security protections. Because the machines are compromised, hackers can gain access to the network and wreak havoc. Older hardware and software is a huge security risk for your company.

Your Company’s Productivity Suffers

Lou and Larry haven’t embraced the cloud and so they’re still running older, on-premise systems. That’s a shame, because today’s cloud-based applications are able to talk to each other much, much, MUCH more easily than systems resident on servers and older PCs. Because of their “isn’t broke, don’t fix it” mindset, employees at their company re-enter the same information two or three times and usually make a mistake or two along the way. By embracing change and replacing their older systems, they would see huge gains in productivity.

Your Recruitment Suffers

About half of today’s workforce are Millennials – those who are currently between ages 18 and 34. These people have grown up in the cloud – they’re used to Facebook, mobile devices and apps for everything. When you show a prospective employee around the office and they take one look at your older systems, they’ll run for the hills. Who wants to work for a company with such outdated technology? What is this, the 1980s? Is that an actual Atari console? Today’s recruits want – no, they expect – to work with the latest and best cloud-based software and to be mobile – collaborating and communicating from their smartphones just like they’ve been doing for the past ten years. Anything else is a big turnoff.

When it comes to technology, even if it isn’t broke, it still needs fixing. Technology always needs fixing. It’s an annual investment. Hopefully both brothers will change their old-school ways and accept this fact. Not doing so could be a big problem for their company in the years to come.

Join writer and small business owner Gene Marks each Wednesday for the Small Biz Ahead podcast. You can submit a question for Gene to answer on the podcast.

17 Responses to "The Dumbest Advice About Technology I’ve Ever Received at My Small Business"

    • nicky savage | April 3, 2018 at 10:14 pm

      With a PHD in IT I can tell you two years is early for changing out your system.

      Security of your computers does not change by changing the system. The security changes as you change it and update it.

      A computer is up-gradable and should last any business owner 5 years, and the top of line much longer than that. A new Cpu, more memory, better graphics card and keep up to date with the software and your fine.

      Your speaking as if technology of the computers themselves is what keeps a company abreast. This is just not so. It is not the equipment from what you write about. I can take a computer ten years old and still build my website to work on mobile devices and make a Facebook page with it.

      You can run the cloud with an XP system, although I wouldn’t advise it since XP is not upgraded with service packs or patches any longer.

      All in all in is rarely the equipment but the maintenance that counts.

    • Shawn Hemingway | April 3, 2018 at 10:19 pm

      As a business owner I get your point to some extent. However, some industries (including mine) move at a slower pace than others. I’m involved in the automation field and some of the hardware we use lasts many years longer than the computing hardware. I’ve been in business for so long that we are to the point that we are just replacing systems that we install 15-20 years ago! We keep the old computers around because we need the software to program these relics. I currently own 3 laptops: Windows XP, Windows 7 and Windows 10 (barf).

      The security aspect is real; we solve this by keeping our older machines quarantined (as in off the Web).

      Great article.

      Shawn Hemingway
      President, Scadatek Inc.

    • Doug Coates | April 3, 2018 at 10:38 pm

      Great Article with important information. I wish all of my software clients understood this. BUT its not really a black & white, either/or question. Deciding not to upgrade because it ain’t broke indicates a serious misunderstanding of the important roles that technology plays in business success. Deciding to upgrade just because an upgrade available is also dumb.

      Understand what technology can do for your company, and upgrade your technology when the time is right for YOUR company, not when the technology sales people tell you that you have to.

    • Bruce Meyer | April 4, 2018 at 10:11 am

      Article not at all correct. This is a company-by-company issue, not one size fits all. I own a payroll service that actually moved much faster on DOS – pre-Windows! Why?
      Adding, subtracting, dividing numbers maxed out as being faster that humand can handle, decades ago. Windows has actually slowed us down because handling a graphical user interface is not really needed and “mousing around” really does slow us down. Just switching from account to account is much slower because of all the sofware functions that close and open. 90 seconds to close one client and open another costs about 3 hours a day – just switching! Not that I want to go backwards, but you cannot offer blanket advice to anyone.

    • Stephen Johnson | April 4, 2018 at 11:17 am

      Yeah, yeah, yeah. In regard to the cloud, I agree 100% that it is easier for others to access and interface with your data. However, some of these folks are good folks and some of them are bad.

      Another thing about the cloud that unnerves me is that to access the cloud, you have to have the internet. Seems like it’s one more utiliity that if it fails, then you are unable to access your data.

      The other thing is that cloud access usually entails a subscription, so if you end your subscription, you lose your data. Seems to be more to the advantage of the provider, than the subscriber.

      I know that big companies are RUNNING TO THE CLOUD. Seems to me, it’s a little early.

    • Andrew | April 4, 2018 at 11:42 am

      Maybe that company is so profitable because they do NOT have the ‘latest and greatest’. And they keep their employees off of the web. The web wastes more employee time than just about anything I can think of.

      We only replace our computers when they either break, or when the software we run demands an upgrade. The surest defence against hacker attack is disconnection. Basing you business in the cloud adds to risk, because it is only a matter of time before the ‘cloud’ is hacked. Our business has only ONE computer connected to the internet, we keep it updated, and it is used for business ONLY. We do provide wireless, but on a completely different connection. We also only allow employee devices on that wireless internet. Playing games and messing around on company time? Not here!!

    • Rob Stratton | April 4, 2018 at 11:49 am

      I recently (8 months ago) updated from Windows 7 to Windows 10. I’ve gone from about 1 tech problem a month to 2-3 per week. Not to mention all of the things I can’t do on 10 that I used to do on 7. Also new tech is built cheaper now so that if fails and you replace it sooner. Keeping up to date isn’t helping. XP is still the best operating system I’ve used.

      • Stephen Johnson | April 4, 2018 at 12:33 pm

        Rob makes a good point. My IT guy tells me when to update my technology and to what. What he says is that you don’t update your Operating System too soon because it takes the market a while to figure out the bugs and for Microsoft to develop the software tools to fix them. If you run into a bug that they haven’t fixed yet, then, guess what, you have to LIVE with it until they do. Sometimes Microsoft doesn’t fix the bugs, EVER. Take for instance Windows 8. Do you know what Windows 8 that works is called? Windows 10. As far as I know, my IT guy has not approved anything past Windows 7. Microsoft has introduced several versions that he NEVER approved: Windows Vista for one and Windows 8 for two. GET A GOOD IT GUY. I know one.

    • Linda Colwell | April 4, 2018 at 2:26 pm

      I get the point but you have to look at who writes it…someone in the business of technology….which is worse having your system hacked or being hijacked by a computer/IT/technology expert that once you let in, is impossible to get out of your business

    • Nunja Business | April 4, 2018 at 2:56 pm

      Stephen Johnson is dead right. Putting everything in the cloud guarantees one thing for sure: when your internet is down for whatever reason, you are OUT OF BUSINESS.

      Not to mention weeks don’t go by without hearing about the latest company/service being hacked/exploited or what have you.

      Guess what? My personal and company data absolutely cannot be compromised if I don’t put it up there where everyone can hack into it.

    • Michael D. Poulos, Esq. | April 4, 2018 at 3:14 pm

      I have been running a small Mac-based business since 1988 (and Apple II before that). We have been able to access our on-site servers remotely for what seems like forever. Most Apple computers run for years. We replace them only if needed when a newer operating system offers productivity benefits and will not work on the existing computers. Sometimes new systems take away features we use. We get about 7 years out of a computer. Upgrading can be disruptive and time-consuming, and the latest and greatest is not always worth the cost in time and money. Sometimes it is. We got an iPhone the day it was released to the world.

    • Deborah K | April 4, 2018 at 4:10 pm

      I see several comments I agree with, one of which is that XP was the best OS WIndows put out …the biggest example of “if it ain’t broke, don’t fix it”
      anyway
      I am self employed and work from home. I work with others that are 800+ miles away so sharing some things over the internet is necessary sometimes BUT all my work is back up to external hard drives ( 2, in case 1 fails) so if the internet goes down, it’s temporary and doesn’t affect me too much.
      I replaced my desktop computer when the system just became too slow to process things. Seems that updated programs put more demand on the system and older processors drag which wastes my time, but I in no way update my system annually, that’s just not necessary (in my case)

      and for the record, I don’t think some programs or OS need updating as often as they do, all it does is create jobs for them and a need for us to update/ purchase newer versions just when we’ve become accustomed to the way we were doing things.

      But I do wish I knew a local reliable, trustworthy IT guy/gal.

    • Gene Marks | April 4, 2018 at 7:10 pm

      Everyone – thanks for your great comments.

      Bruce Meyer – hmm, I know a payroll company near Philadelphia that by coincidence does the same thing! You’re right about this though, in the end it’s about doing things as productively as possible. DOS was always faster than Windows. Unfortunately, that train has left the station.

      Stephen Johnson – I’m reconciled with using the Internet – it’s really available everywhere and even if it’s a lousy connection I’ve always had good success with my Verizon data plan. Your points about the cloud are very true. I’m not as concerned with losing data, though, because most good cloud based services can export/backup and send. I’m more concerned about a cloud company just raising their monthly fees. If that happens, what do we do? Move somewhere else? I think once we’re in, we’re in and that’s an exposure.

      • Stephen Johnson | April 6, 2018 at 10:26 am

        I’m not scared about losing my data in the cloud (never thought about it). That isn’t my point at all. My point is not having the internet at all because of some tragedy like a cyber attack. Have you ever heard of US Cyber Command? Lots of countries have them. Many of them our enemies. Their missions are to make their enemies’ internet useless.

        Also, having to maintain a subscription just to have access to your data seems silly. You sound like a big company guy. Big companies have economies of scale that make new software and its risks feasible. Want to screw up your small company network? Have a big company IT guy come work on it.

    • Clyde Hutchison | April 5, 2018 at 12:20 pm

      Putting your data in the cloud, just means someone other than you is holding your data, and you do not know who it is, or if you can trust them. Think about it no digital service is safe.

    • Rick Banister | April 6, 2018 at 2:09 am

      Gene’s comments about Cloud application vendors being able to recover your company’s data are completely imaginary. My company sells backup and recovery software to users of some of the Cloud applications. Guess what — the application vendors do NOT offer to recover your data if you lose or corrupt it. They can only recover the database infrastructure that all their customers use. I have also seen more than one company lose all their on-premise data, effectively shutting them down. Disk backups do not work with databases unless you shut down the database, and not necessarily even then. Whatever you do, keep a recoverable backup in a completely different location than your application data. If all of it is on-premise, a fire or break-in could destroy all copies of any data in your office, so keep the backup off-premise and verify that it’s actually recoverable.

    • Bobby | May 17, 2018 at 3:57 pm

      This article does make sense. I do want to address some of the comments made.

      1. Windows XP did have it’s own set of bugs/issues/vulnerabilities. I still work on computers with Windows XP. You would be surprised how many viruses are able to infiltrate the operating system.
      2. Apple is not what it used to be and is an IT nightmare. They upgrade their OS every year and after a few years the older operating systems become obsolete…not to mention doing a company wide upgraded and dealing with bugs gets very expensive.
      3. People often get confused with what the cloud is. The cloud has existing ever since we were able to connect to the internet. Essentially if you device, tablet, phone, computer connects to the internet…guess what…it’s connected to the cloud, thus, making it vulnerable to attacks.
      4.Cloud backup is very popular and the data is encrypted. The data centers usually have redundancy not only internally but geographically. This makes data recovery extremely easy and less costly than what it would be to perform recovery of a damaged hard drive.
      5. If you think your network environment or internal server is safer and more secure…think again! It’s likely not and has many ways of data getting stolen.
      6. If you want to be sure no one can steal your data, write it down on a piece of paper. That is the true way of not having cloud services. Plus who wants to steal a piece of paper these days?!
      7. Computers used to cost in the thousands…now you can buy the same in the hundreds or less. Just remember you get what you pay for. If you buy a consumer special at a big box retailer for $299 and use it for business, well guess what, you will need to replace that likely every year or two. You can buy hardware that is quality built and will last for years but will cost more than a discount special. Just look at the warranty that comes standard. If a system comes with a 1 year warranty then the manufacturer is willing to only cover it for that because they know that outside of that year it’s likely going to break. Business systems usually come with 3 year warranties because they know it will last that long. This also goes for all hardware. People wanted cheaper computers, so manufacturers built “value” lines. Next time you call Support for your computers, notice how they separate if it’s for business or consumer retail. This goes for many things not just hardware, but Internet Providers, Software Vendors, etc.
      10. Windows 7 is great, but I will tell you Windows 10 is just as good if not better. Windows 7 is much slower than Windows 10. People just had/have to get used to change. The changes were mainly graphically and aesthetics. I agree not everything is perfect but it’s progress in the right direction. Windows ME, Vista, 8 were definitely disasters. It takes a few to make good ones.
      11. I can list many more Apple operating systems that were disasters. Apple computers didnt get hacked before because they were not as popular. Norton and McAfee had products to protect Apple computers back in the 90s as well as still have them today. Ask yourself, would these companies spend millions to develop a product for a computer that didnt need it. Now that Apple has gotten so popular hackers are drawn to them. Plus being the fact that they are expensive, it’s more worth their time to hack someone with an Apple because they tend to be more affluent.
      12. Apple has done great marketing making people think they are more superior. Internally they are the same as a Windows PC. Only difference is the graphical user interface. If you buy a Windows PC with the same internal components, it would cost you about $500 less than a $2000 Apple computer. People just tend to buy cheap hardware, so they dont last, but with Apple they spend thousands and brag that they last longer. Ask yourself why.

      Just so you know, I own all brands and am not affiliated with any one brand. I am in the industry and have a love for all technology. I learned on an Apple IIe, Commodore 64, and some others. I own a technology company. I have over 30 years of experience, so know a little bit about technology. I read up on the latest just for fun and implement the latest technology for several clients. My work is my hobby!

      – My 2 Cents

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