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Key Storage Trends and Challenges for SMBs in 2020

Posted: 16 Jan 2020 09:00 AM PST

As we move into 2020, storage demands continue to rise. The need for storage solutions that meet all of the business needs while keeping costs down and limiting the complexity of the infrastructure will be a critical trend in the next year. IT professionals must stay ahead of these trends and challenges now if they want their organization to have a competitive advantage.

Need for quick scalability

As data is accumulated and big data and AI become essential tools for tomorrow's business landscape, storage solutions that offer quick scalability will become a vital factor for success.

Not only does scalability protect your business from fluctuating periods of demand, but it also allows you to deliver a better, faster customer experience. Instead of having to overhaul your entire storage infrastructure, you can simply expand it or scale it down according to your needs. This is particularly true for e-commerce businesses, where speed is vital for profitability.

Scalable storage solutions will also allow you to make changes to your IT infrastructure more cost-efficiently, regardless if they are planned or not. You can scale up or scale down, all while keeping your capital expenditures and operating expenses low.

Need to reduce data storage costs

The cost of storing data is on the rise, and it's not showing any signs of stopping. In 2016, SMBs invested, on average, $286,000 in data storage. In two years, that number rose to $889.000. We can only expect similar growth as the market expands due to an increase in demand over the next 5 years.

While, in theory, data storage has become cheaper, that is only true when you look at hardware costs alone. Even though the cost of storing one TB is estimated to be $3,351 a year, people need to stop measuring storage costs in terms of dollars per TB, because there are a number of hidden costs that drive up the total cost of data storage.

The first one is data backup. Backup cost is a function of the storage volume. The more you back up, the more it's going to cost. As simple as that sounds, many companies fail to realize it. Business tools that help you search, process, and use all your data take up precious CPU as well.

Another hidden cost is maintaining on-the-go access to various file-sharing services, which can reach $450 per user on average. WAN acceleration for better network speed and better bandwidth are also eating into IT budgets and can cost $8,000 per location on average.

Then there is an area that is much harder to put a number on: maintenance and operation of data storage. The true cost of keeping data storage running smoothly will depend on many things: vendor services, hardware, and other IT resources – but with the rising cost of data storage and stagnant IT budgets, maintenance is an ongoing headache for many companies.

Need for greater IT flexibility

The consumerization of IT has changed expectations. Users expect fast solutions that deliver good-quality results, regardless if they are at home or work. As businesses adapt to cater to a new generation of users, 76% are looking to cloud apps and platforms to accelerate IT service delivery, according to an IDG Survey.

More and more businesses use automation and implement chatbots to improve delivery and support while reducing long-term costs and improving end-user satisfaction. The goal is to do more with less, but automation and chatbots often come with more software and, at times, more hardware needs. These must be compatible with the existing IT infrastructure.

The need for more flexibility in storage and software solutions is driven by the need to enter new markets quickly, meet security requirements, manage small budgets, mitigate risks, and fulfill various data protection obligations. On top of that, software solutions should also have an option for customization in order to build a storage infrastructure that works for every business case. 

Another factor that drives the need for greater flexibility is workforce mobility. Gartner has estimated that around 70% of all software interactions will occur on mobile devices by 2020. This calls for greater flexibility when it comes to access to systems and real-time data.

Need for greater IT security

Cybercrime has become easier and less risky to commit. Cheap and easy to use hacking tools can be found on black markets and, given that we are living in a Cloud Generation, there are plenty of sources to hack. Having all data online, in the cloud, is a double-edged sword: it helps with backup but hinders security. Hacking, privacy breaches, and cyberattacks are common risks in the cloud.

Juniper Research estimates that the average cost of a data breach will exceed $150 million in 2020. Compared to a global average of $3.86 million in 2019, the predicted change is astronomical.

A cyberattack can harm your business in many ways. A report from KPMG revealed that:

  • 42% of companies suffered financial losses
  • 42% experienced a disruption of business processes
  • 33% had confidential information leaked
  • 25% suffered damage to reputation

But the threat of data breaches isn't the only driving factor of the demand for better IT security.  Regulations such as HIPAA and GDPR require the companies to take cybersecurity more seriously or face large financial penalizations. These regulations were created as a response to numerous data breaches and growing demand from consumers for better data security.

Failure to comply with personal data protection might also cause public outrage and mistrust. Still, according to KPMG, as many as 76% of companies do not have contingency plans for personal data breaches in place.

When it comes to increasing security, keep these best practices in mind:

  • Use strong passwords and multi-factor authentication
  • Remove and delete inactive users
  • Segregate your network
  • Scan servers for viruses
  • Update software and OS regularly; only install trusted software
  • Have a patch management strategy
  • Monitor and baseline network protocols
  • Use network address translation (NAT), firewall, SSH key authentication, VPNs, honeypots and honeynets
  • Encrypt data
  • Detect insider threats
  • Scan for vulnerabilities and backup data regularly
  • Monitor third-party access to your data
  • Physically secure your network equipment

Lastly, no company is an island, but a part of one or multiple value chains and what one does affects the other. Hackers have found ways of getting into larger enterprises through third-party vendors. Work with your business partners to ensure ongoing joint cybersecurity.

Need to move away from multiple storage solutions

As more apps and software are introduced to make processes run smoother, businesses are spending more time and money to manage them. Often, the more applications you have running, the more work it will take to make sure you are getting the most value out of each one.

Besides that, many companies have to manage cloud solutions together with legacy software, which can be a challenge when it comes to flow, storage, and interconnectivity. This can be especially problematic when different apps in different systems need to share data for optimal performance.

To solve the problem, numerous cloud storage managers have popped up, but it's only a temporary solution. Good integration is vital for making storage management system work. Whichever solution you choose needs to work with the apps that you use now or in the future.

Also, the more providers you deal with, the higher the risk of data breaches, bandwidth limitations, and more difficult data management system.

Data storage will see major changes and challenges in 2020 as companies continue to feel the strain of increasing demands and limited budgets. Understanding the need for flexibility, scalability and security will help organizations build a simplified infrastructure that fits their needs and prepares them for the data challenges of 2020 and beyond.

 

Employees, Not IT, Are Driving the New Technological Revolution

Posted: 16 Jan 2020 08:00 AM PST

  • The status quo is no longer acceptable, and employees now see to it that organizations' IT departments embrace the shift.
  • IT teams that aren't asking their youngest employees or even their own teenagers (the next generation of workers) about the technology they are using at home are doing it wrong.
  • As with so many issues facing organizations today, there is often an easy fix. It just takes the wherewithal and the willingness to allow it to happen.

For many years, companies' IT departments issued employees a suite of tools to use, but they put little thought into whether these solutions were the right ones for the job at hand.

Unfortunately for employees, there was little room for debate or discussion. Organizations simply rolled out technologies to everyone regardless of whether they needed them, and if they were not the right ones, there was often little the employee could do.

The disconnect is real, and it is widespread. According to a survey from Resume Lab, more than one in four employees would upgrade the technology in the workplace if they were in charge. That outpaces the number of workers that would add health benefits to their workplace or decrease micromanaging.

Technology has dramatically transformed how people and companies go about their business. These changes have brought us to the cusp of new experiences, supported by new and emerging solutions. Organizations must anticipate the changes and identify technologies they believe will significantly – and positively – impact their businesses and their teams and decide how to use them to drive results.

The status quo is no longer acceptable, and employees now see to it that organizations' IT departments embrace the shift. For companies, joining the revolution has a practical business case: If employees believe they have the right tools for their jobs, they generally perform better.

Who is choosing the technology?

A report from PWC found 90% of leaders say they are choosing technology for their organization with their people in mind. But, only about half (53%) of their employees agree.

This disconnect happens when organizational leaders do not have a firm grasp on the daily routines, and therefore, the needs of their multi-generational employees. Because of this, leaders often make decisions that are not the right ones for their teams, a move that can have widespread and long-lasting ramifications.

As the PWC study aptly notes, the result is poor employee experience and poor overall organizational performance.

The remedy is to rethink the decision-making process, including who has input and who makes the decisions. IT teams that aren't asking their youngest employees or even their own teenagers – the next generation of workers – about the technology they are using at home are doing it wrong.

The mobile workforce

Organizations have discussed and debated the idea of mobile workers for several years. After much debate, it's here, and its arrival requires companies to reassess their structures and implement solutions that encourage and enable their teams to work wherever is most convenient for them and deliver meaningful results.

Look at mobile devices as a prime example. They have eclipsed desktop computers as the platform of choice for many workers. Currently, more than 5 billion people globally use mobile devices, and successful companies engage with employees and customers in a manner that reveals an understanding of and an appreciation for their needs. In doing so, they deliver a personalized and engaging experience.

Perhaps unsurprisingly, remote working is more the norm than the exception. Upwards of 70% of workers do not sit behind a desk daily, Deloitte research shows. Employees at every level use technology for their daily tasks, to collaborate with colleagues and interact with customers and prospects.

Whether they work from a centralized office or remotely, workers regularly change their location during the day. A remote worker might shift from a coffee shop or their home for part of the day and run errands in between. A worker at the office similarly moves from a cubicle to a conference room to the off-site coffee shop across the street.

In both scenarios, workers do not change their devices as they move from one location to another. But since the device doesn't – or shouldn't – matter, employees can stay connected and access critical information, so momentum continues uninterrupted, even as they wait for their coffee.

What workers want

As younger workers, particularly those from Gen Z, enter the workforce, they expect their work experience will mirror their personal experience. A survey conducted by U.K.-based Coleman Parkes Research on behalf of the Workforce Institute at Kronos, reveals nearly half (48%) of employees worldwide said they wished their workplace technology performed like their personal technology.

That number is likely to increase as new workers enter the workforce. There is no reason organizations cannot deliver against this expectation.

The danger of not doing so could manifest itself in two ways. When employees don't have the tech they need or want, they bring their own. The same is true when a company gives employees technology that isn't as easy to use as the personal solutions they have at their fingertips and use every day.

Meet people where they are

The 2017 Adobe Mobile Maturity Survey found more than 90% of respondents consider mobile to be their "primary device." For many adults, a mobile device is the first screen they view in the morning and the last they see at night.

Some smartphone users touch their phone 5,427 times every day, qualitative research firm Dscout found. According to eMarketer, the average adult spent 3 hours and 17 minutes every day consuming media on a mobile device, an increase of more than an hour since 2013.

Successful companies recognize this shift and are employing technology that meets employees where they are: on their mobile devices. This approach is particularly important as the lines between work time and personal time blend, but according to the PWC study, just 60% of employees are satisfied with the mobile options available to them at work.

Embrace to innovate

Organizations' employees are in the trenches daily, and they know what it takes to deliver. Often, it's as simple as a platform that enables teams to maintain collaboration as they move from one screen to another, or similarly from one location to another. Employees are curious when it comes to technology, and they are willing to invest time in learning a new platform.

Employees are often the early adopters of new technology and are well-suited to find a practical use for a platform before the IT department, and freemium options have further empowered employees to choose a solution rather than IT mandating a particular route. The PWC study found nearly three in four (73%) people surveyed said they knew of a system that would help them deliver better work.

As with so many issues facing organizations today, there is often an easy fix. It just takes the wherewithal and the willingness to allow it to happen. The companies that embrace the trend are the ones that will find themselves ahead of their competitors.

Stay curious

Because every employee is unique, there are countless ways organizations can use technology. As new solutions appear, shrewd organizations remain intrigued about discovering new ways to leverage technology, especially when it comes to employees' mobility.

As younger workers enter the workforce, they bring with them a new view of technology. The younger "digital natives" grew up in an always-on world and expect to remain connected regardless of the time of day and the location. Mobility is second-nature to them, just as it will be for the generations that follow.

Organizations must leverage technology to more competently and more assertively navigate the ever-expanding number of digital channels and touchpoints while creating relevant and enjoyable experiences for everyone.

Harnessing the latest technology permits teams to collaborate and communicate based on their unique needs. How are you using technology to enable collaboration?

5 Ways to Gather Customer Feedback for Exponential Growth

Posted: 16 Jan 2020 07:00 AM PST

  • Customer feedback is one of the most valuable resources marketers have at their disposal. 
  • Lead magnets can help you entice customers when you want their opinion. 
  • Stopping visitors from leaving your site without engaging can drastically improve your traffic and sales. 
  • Social media is an excellent place to listen to your audience, with 80% of all internet users having at least one social media account.

Business owners and marketers understand the value of customer feedback. Listening to what your customers, prospects, and potential leads think can have a considerable impact on the growth of your company. 

There are plenty of great forums where you can listen to your audience. Platforms like social media and email offer excellent opportunities for having a personal conversation with your customers and understanding their needs. 

The more information you have about how your audience thinks, the better chance you have at expanding your business and offering new, engaging content. Most people believe that they can create a contact form on their website, and they're done. There are so many other ways you can gather customer feedback, so we are going to look at five of the best tactics for getting your target audience to voice their opinion. 

Offer a lead magnet

Lead magnets are exclusive pieces of content or discounts that are generally given away to consumers in exchange for their email address. These lead magnets are also a great way to gather some feedback from consumers. Don't worry; you'll still have the opportunity to ask for their email address for your email marketing campaign. 

We are all familiar with opt-ins that ask consumers to enter their email address for a discount, ebook, or checklist. Instead of just asking for an email address, try adding a few questions to the pop up for readers to fill in if they want to accept your offer. 

For instance, if you work at a marketing firm and offer a free ebook on marketing rules, you would want to ask consumers about their biggest pain point in the industry. You can use this information to create new blog content, design new products, and improve your existing offerings. 

Send a post-purchase email 

Email marketing is one of the best ways to build trust, nurture your leads, and gather consumer feedback. Additionally, email marketing has a staggering 4,400% return on investment, meaning you'll get the most bang for your buck when working with these customers. 

After someone buys a product or signs up for your service, give them time to receive and use their purchase before you send a feedback email. We suggest waiting at least one week before you ask consumers about their experience. 

When you send out the message, start by thanking them for the purchase. Next, ask customers what they thought of your product and whether they would refer your business to a friend. Finally, ask an open-ended question about their overall experience and encourage them to give as many details as possible. 

Once you gather enough feedback, you can fine-tune your customer personas, redesign your website, or tweak your marketing campaign based on the results. 

Use pop-ups and chatbots to stop cart abandonment 

If consumers come to your website, look at a pricing page, put an item in their cart, or interacts with your brand but don't finalize the deal, this is called abandonment. Business owners lose countless customers and sales when abandonment occurs. 

Luckily, you can reduce how often customers leave your website by encouraging them to ask questions when they leave. There are marketing systems that allow you to create targeted pop-ups when customers leave your site, which is a pivotal moment for all marketers and business owners. 

The pop-up can ask customers if they have any questions before they go. This technique can help you gather feedback and fill gaps in your sales funnel. For instance, if 60% of consumers abandon the checkout page because you don't include taxes and fees before they hit the checkout page, you can solve this problem by changing your price to reflect an "all-in-one" package. 

Chatbots and AI as a whole are extremely useful for gathering data and compiling it into comprehensive reports. Learning about your customer's questions and pain points with a chatbot is easy and effective. Add and program a chatbot on your website that asks every consumer if they need help while they are browsing your blog or storefront. Depending on the complexity of the problem, the chatbot can solve the issue or send the customer to your live support team. 

Understanding the barriers that hold customers back is one of the fundamental keys to growing your business. 

Research consumers on social media

Social media is a great place to hear what consumers have to say. The main reason marketers focus on social platforms is the fact that 80% of all internet users have at least one social media account. In other words, your industry almost certainly has a community on big platforms like Facebook, Twitter, and Instagram. 

Facebook alone has 2.45 billion active users. Their "groups" are beneficial for marketers that want to listen to feedback about their product and the industry as a whole. Business savvy marketers will hang out on major groups that focus on their industry and listen to the attitude of people that need the products they're selling. 

Let's say your website specializes in selling custom gardening tools. You might want to consider hanging out in gardening groups on Facebook, or comment sections on YouTube videos, to learn what people interested in this niche expect from products and services they buy. If you can pinpoint specific trends and behaviors, you can use this information to craft future blog content and fine-tune your product selection. 

Additionally, social media is an excellent place for you to engage with followers on your social media profile. For example, if you wanted to brainstorm content ideas for your marketing blog, you might want to poll your users and ask about their biggest marketing struggle of the year. 

If over half of those people say they had trouble with their content marketing, you can create content that fills this success gap and builds brand loyalty. As more people become loyal to your brand, you get the opportunity to gather more information on your customer base, which aids in delivering an excellent user experience and personalized product recommendations. 

Conclusion 

Customer feedback is essential to the growth of your business. There are plenty of ways you can keep your ear to the ground and hear what people in your niche think about your product and the industry as a whole. Social media, email, and on-site surveys can help you learn about personal experiences. When researching groups on social media, you can pinpoint broader trends and adjust your strategy accordingly. 

The key to using these techniques for growth is gathering sufficient data and using it in a way that shows consumers that you're listening and want to help them find success. You should never stop listening to feedback because needs, pain points, and goals change over time. If you're willing to pay attention to your customers and meet their needs, there's a good chance they could reward you with lifelong patronage.

How to Automate Your Business

Posted: 16 Jan 2020 06:00 AM PST

  • The reward of entrepreneurship is freedom in time and decision-making, but if your business is not automated, you are an obligate full-time employee with little freedom.
  • To be independent of your business, you must break down its processes to ensure the quality of its operations.
  • You need a department chart, training manuals and key performance indicators as a bare minimum to automate your business.

You take on significant risks to start your business. The reward for these risks, in theory, is that you will have more freedom. However, when you set up a business as a hands-on system, you make yourself an obligate full-time employee within your organization. This obstacle comes in the way of the freedom you deserve. In this article, I will break down how you can automate a small to midsize business.

The essential components of an automated system

You automate a business by structuring it into a system where, through the help of compartmentalized training material, anyone can do anyone else's job (within reason). A great example of this is McDonald's, which is perhaps the first automated fast-food business. Ray Kroc systemized it to franchise the restaurant. 

Here lies the key to systemizing your business. First, you must see if a business franchise exists within your industry. If there exists a franchise within its market, it is possible to systemize the business. The next step is to find out which management consultancy or franchising service worked on the project. If you hire the same agency, your business will be automated in no time because the experts already have the components of the system down. 

What are these components that I speak of, you may be wondering? A system consists of the following components:

  • A department chart – defines the chain of command and feedback.
  • Key performance indicators (KPIs) – to benchmark and track the performance of every employee/department. 
  • Training manuals – break down every task down to a predictable, consistent system.

Why do you need a department chart?

"Who does the sales girl report to?" I asked the business owner I was working with. "Me," he replied calmly. "Wait, you have a sales manager," I couldn't understand. "Yea, she reports to the manager too." "And who does the manager report to?" I asked. "To me." 

I have come across many businesses like this. The owner directly commands employees on all levels and has managers in place who are redundant. The managers report to him, but so do their subordinates. In other words, it's just a vague ball of organizational failure, and the only redeeming quality of this system is that it gives the owner an illusion of control. 

The truth is that a system built for control is not ready for expansion, and what the owner has is control of a dwindling kingdom. The destiny of such a business is to be overtaken by upstarts and newcomers in the industry. A company with a strict department chart can beat a competing business five years senior to it.

How much control does an owner have if he cannot control the fact that his business is destined to buckle on its organization? 

A department chart establishes the role of each department and the reporting chain of each employee. The owner is not involved in doing multiple managerial jobs full-time. Getting this right is pretty much the single most significant contributor to automating. But, of course, it is not easy to let go like that. 

I came up with a mental exercise that can help you. To commit to an organization chart, start thinking of your business as the 20th branch of your business. This perspective shift makes you focus and organize in a way that leaves you room to run a company 20 times the size of your current one.

How pettily attached to each branch would you be if you had 20 branches? Run this mental exercise of picturing your business at 20 times its current size. Would you want just to be running around all day listening to every employee if your workforce was 20 times its current size? Exactly. So the system you would want in place then is what you have to map out now. This approach is how you must build your organization's department chart, and under no circumstances must you undermine this strategy. Surprise checks are all a business owner needs to account for possible corruption. Key performance indicators also help shed light on which failures are due to corruption and which ones due to incompetence.

Why do you need key performance indicators?

Our neighbor's kid, let's call him Ahmed, had weight issues. His doctor recommended exercise, so his dad enrolled him in the local sports camp. Ahmed's dad told him that what was important in his matches was that he ran and got his exercise. This Ahmed understood.

In his first game, he got picked by the blue team. The blue team was very excited to have him and thought of him as an asset. The game began, and the green team gave the blue boys a tough time. When all was said and done, the blue team had lost the game. But Ahmed was happy that he gave his best performance. On his way out, the captain called him. 

"Hey Ahmed, what was that?" he looked mad. "I did great. I ran a lot! I covered the whole field," Ahmed replied. "But Ahmed, my brother, you were the goalkeeper!" 

Similar is the case with too many businesses. Employees are busy and are executing tasks without precise results to measure performance. Keeping goals vague allows for ineffective employees to stay within the organization. This misjudgment fuels the owner's need to be watchful on every level and keeps the business from ever getting automated. HR must reverse engineer, by breaking down tasks, from an overall end goal for each position. Sample KPI sheets are readily available online for standard jobs, so there is no excuse for a strict KPI table not to be in place for every position. 

Finally, if someone falls short on his or her KPIs, there is no solution but to fire the individual. Owners who make excuses or lower targets for employees they like are using their own time and money to sabotage their own business. Moreover, they are teaching other employees that it is okay to slack since no real consequence exists. Once other employees start believing that it is optional to meet standards, they will not meet their KPIs. A non-negotiable must be a non-negotiable all around. 

Enough times have I heard owners say things like, "But he has been with me for five years" and, "He is very loyal, though." It turns out; loyalty is not a replacement for competence, and employees who are ineffective at their jobs might try to use loyalty and relationships to redeem themselves. 

This orientation is toxic to the business as it sends out the message that friendships and feelings are an acceptable alternative to performance. The organizational model then shifts towards everyone trying to be likable to the boss instead of useful to the business. Once the company starts operating at a loss, and the boss is unable to meet the payroll, he realizes that all the loyal people are shopping around for new jobs. Just like your employees would not work for you in the absence of payment, you should not have them employed in the absence of performance. It is that simple. 

Why do you need training manuals?

The final component of automating the business is training material. Manuals and videos are created for positions and arranged by departments. Every post on the organization's chart must have a corresponding training manual. 

You must experience systemized performance before setting forth on your material building journey. 

  • When you order a coffee at Starbucks, notice how they process the order. 
  • When you stay at a hotel, look at how they arrange the bedsheets. 
  • When you sit in a plane, look at the emergency landing presentation they give. 

These are examples of performance dictated by manuals. What is worth noticing is the consistency in the level of detail. The manuals capture, in the highest resolution, the operating protocols for client-facing roles. Nothing is left for the employees to figure out. There is nothing too obvious to be written down. Whatever one can put into the manual is put into the manual. Then the manual is given a test-run by having someone with zero prior knowledge independently study it and give a performance. If a newcomer can execute the job by independently learning from the manual, then you are good to go. 

It worth noting that manuals must be created for every employee, even managers at the highest level. Manuals are not just for entry-level employees. I have had managers perform well with manuals, though the kind of manuals required for the higher-level executives are a bit different. You can contact a business consultant with automating expertise to do this for you. 

Once you have the system in place, you must allow it to run while you gradually let go of the wheel. Of course, hiring the right person to replace yourself as the director is essential. Your replacement must handle every aspect that does not excite you so that you have freedom from the work that exhausts you. Being able to wake up to only do what excites you is the ultimate reward of automating your business.

Are PEO Payroll Services Worth It?

Posted: 16 Jan 2020 05:30 AM PST

  • When a business hires a PEO for payroll, the PEO becomes co-employer, and assumes the responsibility of managing the client's payroll and employee taxes by using their own tax identification numbers, rather than the client's.
  • If you choose a standard payroll processor, you are responsible, as an employer, to be insured for worker's compensation if your state's laws require it.
  • Payroll frequency defines how often your employees are paid. The standard payroll schedules include weekly, biweekly, semimonthly and monthly.  

There's always the option for small business owners to manage payroll processing on their own, but the thought of gathering employee information, issuing paychecks, and recognizing required taxes and withholdings can be daunting. When considering the alternatives to DIY payroll, you have multiple options, including standard payroll services and payroll software. 

But, if in addition to payroll, your business needs other services – such as HR, compliance and taxes – consider working with a professional employer organization (PEO).  

PEO payroll

Whether you're a new business considering a PEO or a business owner looking to manage your own payroll administration more efficiently, there are several key pieces of information you'll want to gather and some decisions to make to ensure your payroll is operating smoothly. 

  • Employer Identification Number (EIN) and state tax ID. Your business needs a unique identifier, and for the purposes of federal filings, you're required to have an EIN to process payroll and submit payroll taxes. For some states, an EIN is all you need, while for others, you may also need a state tax ID for your business. 
  • Employer information. It's crucial to have each employee complete Form W-4. With it, you'll be able to calculate how much federal income tax to withhold from your employees' paychecks. Employees should also complete their respective state withholding forms. 
  • Payroll scheduling. You need to decide on your business's payroll frequency, which determines how often you will pay your employees. The standard payroll schedules include weekly, biweekly, semimonthly and monthly. Make sure your schedule follows state law and industry requirements. 
  • Tax withholding. From each paycheck, your business is obligated to calculate and withhold the correct amount of taxes. Once your calculations are accurate, make sure your employees understand how to read their pay stubs. This can improve employee trust and satisfaction in the long term. 
  • Pay taxes. This is the final step of payroll processing. Due dates vary for various taxes, so it's a good idea to make note of each date. If you're using PEO payroll, ask about the tax filing process and if there are any guarantees or liabilities in the event an error is made. 

 

Editor's note: Need a PEO service for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.

 

What is a PEO payroll?

When a business hires a PEO for payroll, the PEO becomes co-employer and assumes the responsibility of managing the client's payroll administration and employee taxes by using its own tax identification numbers, rather than the client's. 

The PEO is generally responsible for payroll-related tasks, including paying wages, depositing employment taxes and issuing employee W-2s. PEO payroll helps administer payments to full-and part-time employees, and occasionally vendors and contractors. Your business still maintains responsibility for day-to-day operations and management. 

When a business engages the services of PEO, it's relying on the PEO to accurately process payroll, and ensure compliance in all states and municipalities, according to Andrew Lubash, founding partner and CEO of Prestige PEO. 

"PEOs report federal and many state payroll taxes under the PEOs tax identification number," Lubash told business.com. "In some instances, the PEO's state unemployment rate may be lower than that of the client company, thus generating a savings." 

Lubash says that in order to reduce risks, clients should ensure they partner with a PEO that's an IRS-certified PEO (CPEO) and is accredited by the Employer Services Assurance Corporation (ESAC), because they are required to maintain strict financial and tax reporting requirements, provide financial assurance, and adhere to industry best practices. 

What are the differences between standard payroll services and PEO payroll services?

For many businesses, using payroll services is an assurance that their company's payroll processing is done correctly. Plus, having one less task to manage can make filing taxes and accounting for the fiscal year much easier. 

Is it more beneficial to choose a standard payroll service or a PEO payroll service? 

With standard payroll services, employers retain sole responsibility of their workforce while offering standard HR services, according to Simon Hansen, founder and sports blogger of Best Sports Lounge. 

"PEOs, on the other hand, do all the things that standard payroll services do, only better and with added benefits," Hansen said. "Having a partner company means that not only do you get to save on costs, you also make sure that your employees get the best service they need, all while maintaining full control of your staff." 

Standard payroll services do not handle many administrative responsibilities, while PEOs can provide complete HR services, including health insurance, employee onboarding and training, 401(k) and retirement plans, workers' comp, new hire recruiting, and regulatory compliance assistance. 

With payroll service providers, you are responsible for the payroll taxes, insurance and compliance programs, according to Brian Cairns, CEO of ProStrategix Consulting. 

"They [payroll services] do provide options, but in the end, if they are wrong, you get the bill," Cairns said. 

There are a few differences between standard payroll services and PEO payroll services in terms of employer record, workers' compensation, pricing and ease of use, according to Nidhi Joshi, business consultant for iFour Technolab Pvt. Ltd. Joshi explains these differences below: 

  • Standard payroll services provide payroll processing for the business, and the business remains the employer of record. If you choose a standard payroll service, you are responsible, as the employer, to be insured for worker's compensation if your state's laws require it. 
  • PEO payroll services provide payroll processing with the PEO as the employer of record, also known as co-employment.  This is not to be confused with employee renting. Your business is responsible for recruiting, hiring and training, even though the PEO is the employer of record. 

Joshi says that when using PEO payroll, there is usually a pay-as-you-go program that allows you to pay the PEO each pay period based on your actual payroll, similar to how a standard payroll company charges for their services. 

What does PEO payroll cost?

The cost of PEO payroll can vary depending on several factors, including employee salaries and the employee benefits that a client wants to take advantage of. Most PEOs charge a flat fee per employee or a percentage of each employee's salary. 

  • Payroll percentage. This is a percentage of the total payroll for each pay period, plus local, state and federal taxes, workers' compensation, and employer practice liability insurance (EPLI). 
  • Per employee, per month (PEPM). The PEPM fee is calculated directly by the PEO when you sign up. 

The more employees you have, the greater the discount per employee that is offered, according to Josh Knauer, adjunct professor at Carnegie Mellon University and former tech entrepreneur. 

"Rates usually start between $100 and $150 per month, per employee and can get as low as $50 to $80 per month, per employee for larger companies," Knauer said. "That fee usually covers all basic HR services offered by the PEO." 

The costs calculated by percentage of payroll vary and tend to be directly tied to the amount of payroll you do with the company, according to Alexander Kehoe, co-founder and operations director of Caveni Digital Solutions. 

"In our experience, 3 to 5% has been fairly standard in our dealings, but smaller companies should be wary of companies that are asking for between 10 and 15%," Kehoe said.

Why should you use a PEO for payroll?

PEOs handle all compliance and help their clients avoid legal missteps and mistakes when hiring and managing employees. 

One of the major benefits of using a PEO for payroll-related services is that they take a large portion of the work away from a business's employees, according to Michael Frederick, CEO of Flatirons Development. 

"This makes it easier for businesses to focus more of their time on their day-to-day operations, rather than managing simple payroll operations," Frederick said. "At the same time, since a PEO payroll service assumes all responsibilities related to filing taxes for a company's employees, this takes a significant amount of liability away from small or medium-sized business owners. This can be especially beneficial if a company is still in the early stages of establishing itself." 

Another advantage of using a PEO for payroll is that it can help you save money on the benefits you offer your employees. Since PEOs work with many employees from different clients, you can take advantage of the buying power they provide when searching for group rates on health insurance, workers' compensation insurance, retirement plans and other employee benefits. These rates are generally significantly less expensive than if you were to seek them out on your own.

Why should you not use a PEO for payroll?

While there are numerous benefits of using PEO payroll, there are some downsides.

Frederick says that one downside to using PEO payroll services is that there is often a higher cost per employee compared to when a business manages payroll on their own.

"Unfortunately, while this extra cost can often be managed by larger companies, small and medium-sized enterprises might often have trouble covering the extra cost per employee," Frederick said. "A secondary consideration is that most PEO software is less user-friendly than standard payroll services. This is largely due to the complexity and nature of PEO businesses."

If you have specific benefits you'd like to use and want to remain in control of payroll processing, a PEO is most likely not the best fit for your business. 

Lubash believes that large businesses with thousands of employees are more likely to have fully staffed payroll, human resources, risk management, and retirement services departments and may not benefit from the economies of scale that PEOs provide. 

Overall, a PEO allows you to outsource your business's payroll and HR tasks. They can manage payroll, pay taxes, maintain and sustain workers' compensation insurance, and provide a solid benefits administration. A PEO works as a co-employer that shares employee responsibilities with your business. 

When choosing between standard payroll services and PEO payroll services, it's best to consider the size and needs of your business. 

While there are many pros and cons to using an employer organization for payroll, the biggest takeaway here is that using the PEO model can be a great way for entrepreneurs and small business owners to lower their employer costs. [To learn more about PEO services, read our review of The Best PEO Service Providers of 2020]

Should You Use Open-Source Document Management Software?

Posted: 16 Jan 2020 05:00 AM PST

  • Open-source document management software is a platform that can be shared as a public source and modified to fit a business's specific system needs.
  • It is highly customizable and should be modified by experienced developers.
  • Open-source software is typically free and safe to use. 

A document management system (DMS) can play an integral role in the organization and efficiency of your business. Companies that want a paperless office or a streamlined way to store and access digital documents turn to document management software. The most useful systems allow you to perform a variety of tasks like scan paper documents, control file versions, organize various folders, set user permissions and collaborate with other team members. 

Not all applications are created equal; you must, therefore, choose a DMS that serves your needs and integrates with your other business platforms. Business owners and developers who want added flexibility and customization often turn to open-source DMS solutions.   

Open-source software differs from standard software in that it is not a complete system on its own. Instead, it consists of a base application that businesses and developers customize to fit their needs. Although it may require advanced skills to build, this is especially beneficial for those who need to create advanced or unique management systems for their businesses. 

When choosing an open-source document management system, intraplatform and system compatibility is crucial, said Pravin Vazirani, assistant vice president of operations at Chetu. Your new system needs to communicate with other current business programs.

 "To ensure that a platform is compatible, leverage custom software developers to create company-specific patches and programs to help these systems all interconnect and communicate," Vazirani told business.com. "They will be able to take your 'skeleton' program and integrate it with the rest of your systems."   

What does open source mean?

Open source is a term used to describe software that can be shared as a public source and modified to fit a business's specific system needs. 

"It is essentially a technology platform that has been created as a 'base' of successful actions, plans, development, software, etc., that can be marketed by an individual company with the input of their knowledge and information," said Sarah Franklin, co-founder of Blue Tree AI. 

Companies do not use open-source software on its own, but rather as a foundation for their DMS. It can be very useful for businesses that need advanced functionality or unique management systems.

 

Editor's note: Looking for the right document management system for your business? Fill out the questionnaire below to have our vendor partners contact you about your needs. 

 

How to choose an open-source document management system

Since open-source solutions are flexible, it may seem like there is very little difference between each application; however, this is an inaccurate assumption. Knowing what to look for can help you choose the best DMS for your business. 

The first step in choosing an open-source DMS – or to determine if one is even right for you – is to examine your business and decide which functionalities you want the software to have. Document management applications support several capabilities, so you must determine how simple or complex your system needs to be. 

Additionally, factor in your budget and timeframe. Consider how much you can spend on a DMS, how much it might cost to have it modified, and how quickly you need it up and running. 

Document scanning

One of the most useful functionalities of a DMS is the ability to quickly and conveniently digitize paper documents. Vazirani recommends software that has optical character recognition (OCR), which recognizes physical characters on a page and digitizes them so they can be read by computers. He said this feature is crucial for those who need a full-text search function, as it allows users to search not only by file or format type but also by content. 

Storing, searching and extracting documents

A basic function of any DMS is the ability to quickly store, search for and review documents. This task is simplified with software that can search based on tags and full-text queries. Many businesses benefit from a DMS that automates these functions based on preset rules. 

"Aside from intelligent document recognition and document capture services, robotic process automation (RPA) can also feature extraction technology, which automatically extracts important, desired data from documents and populate databases, as well image processing, allowing for things such as bar codes, QR codes, or other optical marks to be recognized by the system for ease in storing and retrieving documents," said Vazirani. 

If you are using an open-source DMS, creating these rules and parameters may be the most arduous part of the modification process. Vazirani recommends seeking a specialist to help with the creation of your system, since most programmers and AI developers are well versed on rules suitable for DMS and will rely on only specialized input that is business-specific from the users' end if needed. 

"To develop a modern DMS, businesses should, ideally, turn to specialized and custom developers with experience in building high-functioning DMS systems," said Vazirani. "However, for those with software development experience, or looking to oversee a team of developers, one should find the best software to handle user interface paths for both RPA, such as Blue Prism, and OCR, such as Ephesoft, which will help automate the DMS and extract vital data." 

Version control

Having the ability to track document changes can be monumental for your business. Many companies benefit from a DMS that has version control. For example, if you are collaborating on a shared document with your team, this feature gives you the ability to view every previous version of that document and who made each set of changes. This enables you to track the progress of a living document and revert to a previous version if needed.  

Security and regulations

For many companies, internal documents and data are the lifeblood of the organization. The level of security you need depends on how confidential that information is. Having a DMS where you set user permissions and security restrictions simplifies the collaboration process and provides peace of mind. 

Since most open-source software comes with limited security settings, this is something you will need to build into it. If you work in a highly regulated industry, you may need a standard DMS that has the ability to report on compliancy measures. 

Integration and compatibility

Although open-source systems are very flexible, you still need to check that it is compatible with your current business platforms. Having a DMS that can easily integrate with other operations throughout your business will streamline workflow and increase efficiency and accuracy. It is also important that it is compatible with every file type you will work with. 

Usability and support

The complexity of your DMS will depend on your team's needs and capabilities. Find a platform that satisfies your business requirements, yet is easy enough for your team to understand and implement. It can be helpful to find a program that offers a demo or free trial. 

If you want to use open-source software, you someone on your team who is tech savvy enough to modify it, or find someone to outsource it to. If your team is limited on tech knowledge, it can be especially helpful to choose a document management company with good customer service and tech support teams.    

The best open-source solutions

Although there is no one-size-fits-all solution, there are a few great companies that offer intuitive software applications. After much research and deliberation, this is our list of the best document management software. 

However, if you are looking for an open-source DMS specifically, we spoke with industry professionals to get their take on the best options to choose from. 

Vazirani recommends the following open-source document management systems:  

Regardless of which platform you choose, make sure it is easy to implement and modify as your business needs change. 

FAQs

Open-source document management systems are completely customizable and offer many benefits to business owners. However, these applications also pose questions. We spoke with subject experts to answer some of the most common questions asked about open-source DMS programs. 

How do you create a DMS?

Every company needs some type of filing system, whether it be simple or complex. A DMS can be a useful tool to file documents as your business grows. Franklin advised that when you are weighing your options, first assess your business's current filing and data system to identify what it is currently saving and how it is organized. 

"Identify each subject, and discuss what you will change to become more efficient and well managed," said Franklin. "Develop the measures that the business will adhere to and what rules must be followed. Then prepare and study what you and your team have designed and implement it into the workflow." 

How much does an open-source DMS cost?

These systems are typically web-based platforms that are free for public use. However, there may be additional costs associated with modifying the software. For example, you may need to hire a developer to customize the platform for you, which takes time and costs money. According to Vazirani, although software with open-source code is, by definition, open to public use, there are premium options available for purchase that range in pricing. 

Is an open-source DMS safe?

The security of a technology platform is incredibly important. Having a platform that is completely customizable might leave some business owners wondering if an open-source DMS solution is safe to use. 

The short answer is yes. However, there are some security factors you should keep in mind. For example, most open-source systems don't encrypt documents. If you work in a highly regulated industry, you may need a DMS that has the features you need to prove compliance. 

Since companies essentially only leverage program skeletons with open-source systems, Vazirani said the modifications of the system (the part that makes it unique and useful to the business) must be customized to protect your business's data. 

"It is also important to use reputable open-source DMS providers and to perhaps invest in the paid support from many providers that can assist with quickly patching and solving security concerns," said Vazirani.  
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