Strategic Web Investment, What does this mean?
Many businesses ignore the ongoing costs of maintaining and growing their website. They do this at their peril.
Capex (capital expenditure) is usually an easier sell to management than Opex (operational expenditure) costs. Because, Capex is written off as a depreciating asset whereas Opex comes straight off the bottom line – perpetually. Capex generally has favorable tax implications whilst Opex does not.
Today we look at how and why businesses should look at their web investment from a more strategic perspective.
1. The Disconnect
All business investment must be strategic. This means it has to underpin clear goals and then you develop tactics to support the strategy to achieve those goals.
This is business 101 kind of stuff but it bears repeating.
Try going to any CFO and convince them to make a web investment (web build, enhancement or added functionality). They will immediately ask you for the business case for the investment – as they should.
It is not an easy sell but in terms of the result, there is a tangible asset at the end of the exercise. The ongoing investment here though is tough for numbers guys to wrap their head around.
2. The Requirement
Very few businesses have an in-house web team so that means outsourcing. Outsource smartly and the results can be legendary, do it poorly and the investment can turn into a black hole of cost.
We have seen this with clients over and over again, where they have come from another web agency and never saw the value and we try and pick up the pieces and prove our value proposition on a daily basis.
3. Holistic Considerations
When a client comes to us we try and help them ascertain and define their budget for both the build and post live phase of a web project.
This primarily comes down to development of the website and then post live website marketing and SEM services + platform support requirements.
You should follow latest digital marketing trends to promote the website for your businesses and startups.
Clients generally know these costs exist but since they have yet to be defined and justified, that is always a hard part of the discussion to have.
Explaining to clients that websites are not wind up clocks that you build. Wind up and let run is always fun – not.
As website complexity and feature set increase, so do all other associated costs. In that sense, costs grow exponentially as business requirements increase.
There are so many social media trends going on. You can dig the gold from it to promote startup website and to make it brand.
4. The Elephant In the Room
Web Hosting. When you hear this term what springs to mind?
That’s what I thought.
A room full of servers, in a data center, with a handful of geeks running around doing ‘stuff’. No matter how much a business invests in their web presence, they almost ALWAYS underestimate the immense complexity and ongoing costs for web hosting. This is especially true when considering hosting for complex and resource hungry platforms like Magento.
If you are designing your own website, you need to study the efforts required for developing different types of websites.
Why is this? I blame ‘Host Gator’, lol.
Seriously though, there are $20/month web hosts out there that sell themselves as being Magento experts and all the rest. Big promises for $20/mo. And a big let down at go-live when 50 visitors hit the site and it falls over.
But, to stand out your startup and to make it presence, you need to get more traffic to your website.
The reality is that to host Magento properly (with Hosting Support), you are realistically looking at around the AUD$1K/mo mark – base price! A twin Web/DB server setup with hardware firewall is going to run you around AUD$2.5K/mo and that does not even take into consideration initial setup/configuration costs, Staging server hosting, backup/DR plans/systems and version control systems/management.
Want to be serious on the web?
Hosting will cost you but it will cost you more if you cut corners here.
Building an effective and profitable web presence is about so much more than the initial build and go-live process.
Why invest heavily in this portion of the process, only to turn around, chase the bottom line and ultimately let the site languish due to under-investment?
That is counter-intuitive just like letting a home degrade without keeping it clean, painted, and tidy would be.
Your website is a strategic asset so we recommend it be treated that way and that businesses of all sizes plan to make the appropriate ongoing investment befitting a strategic asset.
To do anything else will ensure that the asset underperforms. And that will cause issues in other areas of the business.
This is especially true of web pure-plays as this is the only route to market. And it MUST payoff or the business will cease to exist.
Exceed can help you understand your web investment in detail. And assist you in crafting a strategic vision that will help you meet your online goals so drop us a line and we can help make it happen.