Start-ups should not cut costs on their IT
infrastructure as the right system is an invaluable resource
says Clare Flynn, president at
Beauchamp Financial Technology
A start-up manager without a robust technology infrastructure is at a competitive
disadvantage when it counts most. Increasingly, investors will
not allocate capital without proof of integrated IT systems,
complete with disaster recovery provisions. Regulators, too,
require evidence of fully auditable, time-stamped data.
Start-ups tend to be particularly disinclined to spend money
on infrastructure, but they are also least well-placed to deal
with errors resulting from manually-intensive business
processes, "fat fingers" or unnoticed investment exposures. Any
such mistakes can spell the difference between success and
failure for an early-stage fund.
Unless the principals have experienced it before, start-ups
tend not to understand at the outset just how stressful and
expensive it will be to change systems at a later date. Putting
the right IT infrastructure...