10 methods to save money on your IT Budget (and three DO NOT touch items)
I discovered a new restaurant/ coffee shop which I started to visit regularly. I normally have a cappuccino(ok, who we kidding ? numerous cappuccinos) but on this one occasion, I was early for a meeting so I decided to have breakfast.
I ordered Scrambled Eggs on Toast. The meal comes with a grilled tomato and so I asked the waitress to change that to a raw tomato. Needless to say, the instruction was way too complicated and the meal arrives with the wrongly grilled tomato and not the raw one. So she goes off to get it and magically two slices of raw tomato arrive on a plate. Yum yum crunch crunch chew chew – I ask for the bill and then I spot the line item that got to me.
No it wasn’t the R20 for water – clearly that is the price of normal water (isn’t it ?); No it wasn’t the R35 for the scrambled egg – although to be honest for R35 I could have bought the actual chicken that laid that egg and still have change to buy the loaf of bread… no it was that either.
The line that got to me was the : Extra Tomato – R6.00
To me that screams RIP OFF – GET STUFFED YOU WILL PAY AND TOUGH IF YOU DONT LIKE IT !!!
If you think I am kidding, here is a copy of my slip:
In todays climate business are looking to save cost in every department and make as much money as possible in order to make it through these “tough economic recession climate”.
When it comes to reducing cost, this is a highly emotive topic. The business needs the extra cash but where do you start ? I cant speak for other areas of the business, however when it comes to Technology you certainly have options.
The usage of the correct technology in the business can not only save the business literally thousands per month, but also make the business more efficient and streamlined. The catch is identifying where to make the cut and how deep to cut without killing the business.
So, with over 10 years consulting experience, here are my practical:
10 ways to cut your Technology spending:
1. To print or not to print – that is the question:
The cost of printer toners, printer repairs and cost of paper is staggering. Start enforcing the: “Did you really need to print that?” attitude. Items are electronic to begin with (word document, excel budget etc.) so these can be simply emailed to colleges – no need to print. Oh, not only will you save money, but you will also save trees.
You always get things cheaper if you buy them in together. So if you have a national company, look at streamlining and centralising your IT purchases. Instead of having multiple contracts with various service providers, have one that will service your company nationally – you not only get a better service but you also save as you negotiate on a national level verses on a per branch level. This also applies across departments – look at opening up a stationary account where you buy from one source and get a discount.
A great tip here which I implement everywhere I consult to: Consolidate your bills into one eg. Telephone Bill, then go an pay it on the company credit card. you instantly earn major points and this can pay for a lot of flights !
3. The only constant is change:
just because you were doing something a certain way, doesn’t mean you have to continue doing it in the same way. Things change. In the past you might have used your PABX to make international calls, why not use Skype instead ? Do you really need every employee to fight rush hour traffic ? maybe look at who can work remotely – the technology allows you to keep close watch on productivity and you will be pleasantly surprised to find how hard people work when they can do it from home. You can save company money here
4. Warrantees & Insurance:
All IT equipment comes with a warrantee for a set period of time. You can also extend those warrantees and take out insurance against theft, breakage, loss etc. Total how much insurance you pay for IT equipment. Now take a look at how often you have had to claim from insurance for IT hardware. Does it still make sense ? Did you claim more from insurance than if you had to replace the equipment yourself ? Would it make more sense to buy standby equipment and in the event of a failure or theft, replace it vs. paying the “just in case” insurance cost ? Would it make more sense to have the employees add their laptops/ tablets/ cell phones onto their own household policy and you simple compensate them for that ?
5. Cell phone contracts:
Did you know that you can negotiate a monthly savings on everyone’s cell phone bill if you migrate all contracts to one service provider ? you can even extend that to your employees so that they too benefit from savings. Depending on the value of the contracts a discounted airtime and subscription rate if offered to all.
A great tip which I implement everywhere I consult to: Most people have various Blackberry as their cell phone of choice. If you standardise on this, you can save a fortune by using the Blackberry BBM and the Group chat functionality to communicate with your teams – cell phone bills plummet !
Instead of purchasing servers for each function, your IT team should be looking at virtualising the servers ie. taking multiple servers and putting them onto one. The once-off purchase cost shows dividends very quickly when it comes to this environment as there is less downtime, less maintenance and more redundancy so your business continues to run.
7. Compare Quotes:
A classic mistake. Do not make the mistake of simply getting other quotes on your current system. In my consulting experience, 9 out of 10 times these quotes will be misleading and will confuse you even more.
8. Honest Opinion:
Do not get a “rival IT” company to come in and “give you an honest opinion”. These opinions are never honest and never impartial – they will always find faults and will want to take over the business. After all, that is what they do for a living and they need customers too.
Do not obsess over a single existing issue and try find a solution yourself. If your email isn’t working, don’t force everyone to change over to “FREE GMAIL”. It isnt free and certainly will not cure all ills. Get your IT provider to handle it and don’t let go until they do. In most cases the problem that you see is not the actual issue but the results of an underlying issue. Email might be the frustration, but the cause might be the underlying network.
10. Delay Tactic:
Its ok to delay. There might be amazing initiative that you really want to get into the business, but these require a large capital outlay. You need to ask: “Do I absolutely NEED it ? or it is a NICE TO HAVE ?”. If its the latter, delay it until things are more stable. Also, old doesn’t mean broken – just because a computer is a couple of years old, doesn’t automatically qualifies it for a new replacement. It might be upgradeable. Does it NEED to have the latest applications on it or does Office 2003 still work just as well for that person’s needs ?
Finally, every single time, without fail that the following three items are cut, the consequences are enormous and in some cases the business doesn’t survive.
The 3 absolutely positively DO NOT TOUCH items:
1. IT Service Provider:
Yes, you might have issues with the current provider. Yes, you might think that you can get a better deal elsewhere. But what you should be doing is going back to the service provider, raising all your concerns and forcing them to fix the issues. You will be surprised to find that most times the service provider isn’t even aware of half of your frustrations. Changing service providers to someone who has no history and no knowledge of your business will simple land up costing your a lot more. They always come back with the “oh, we didn’t realise that…” and the “you didn’t tell us that….” and the “it wasn’t in the scope”
Your data, your information, your customers’ information, your financial records all need to be secured. FULL STOP. Not all security products are created equal. That free Firewall software you have on your kids laptop at home, should not be confused as an Enterprise Solution to keep your business safe. Pay your Anti-virus fees and pay your Security fees.
My favourite mistake. This is usually where most companies decide to cut costs. It seems obvious. Replace diginet with ADSL – its a fraction of the price. WRONG. What you do not realise is that the bandwidth is what enables your company to operate. It is the oxygen that allows your entire IT system to live. If you cut your bandwidth, everything is effected – not just how quickly Super Sport loads. Low bandwidth means that emails take much longer to send and be received. Emails with large attachments will grind your entire network to a halt whilst being processed. Rather implement internet management facility so that you can better manage who and what uses the internet- this is simple and effective. Block downloading of Videos and Music and watch how your network thrives.
I am a firm believer of the phrase: “Price is what you pay but value is what you get” and it with these eyes that you need to examine your IT spending.
The time is now to come up with creative ways to save money for the business without the customer getting the feeling that you simply passed off those costs to them.
As for my R6 tomato I am planning on going there tomorrow and bringing my own tomato – think they will charge me corkage fee ????