Just a little off the top!
We’ve all heard it as soon as the belt tightening begins. Cut yours costs, reorganize your staff, renegotiate your agreements, and do whatever it takes to reduce the budget. In IT (and perhaps elsewhere), that can only take you so far. Everyone wants to lower IT costs but saving money is often equated with a sacrifice in quality, support, – or worse, security.
That led us to create this list; ten strategies to help you lighten the infrastructure load without compromising quality, security, or performance. In this post, we’ll discuss:
- Consolidating vendors
- Standardizing Software
- Considering cloud services
- Utilizing a fractional CTO
- Looking at Hyper-convergence
- Conducting an IT Audit
- Implementing Telecom Expense Management
- Re-evaluating your WAN
- Making smart buying decisions
- Firing Your IT Consultant
Lowering your IT costs can be as simple as counting to ten.
1. Consolidate Vendors
You can lower the cost of your homeowner’s policy by bundling it with your car, life, and other insurance needs. The concept of “bundling” is a common way to offer discounts, and it’s a great way to lower IT costs if you’re willing to look outside the box.
A true-up of your enterprise agreement is a perfect time to look for other products from that same hardware or software vendor. We had a client looking to replace an aging PBX phone system while renegotiating its EA with Microsoft. By considering the company’s Skype for Business platform and simply adding it to the existing EA, the client may save millions of dollars in licensing and equipment expenditures versus a traditional PBX replacement.
2. Standardize Software
Organizations have literally thousands of software applications but use just a fraction of the features built into them. And while all may have their own unique qualities, many applications can perform the same functions. The result is more expense, more manpower needed to service them, and capital dependence to keep things current.
You may need to compromise on features but reducing the number of vendors and making broader use of a smaller number of products, can have a dramatic bottom line impact. Ask yourself if 95% of what I want from these twelve areas work with a couple of products, rather 12 different products fulfilling 95% of my needs.
Standardization also has a trickle-down effect on personnel resources. More efficient programs and processes free up people to be redeployed to work on projects that have been neglected for lack of available time and manpower.
3. Consider Cloud Services
Sometimes it’s easier and less expensive to rent rather than to buy. With the explosion of “as a service” offerings, evaluate if leveraging the cloud makes more sense than an outright traditional purchases. It’s possible today to purchase voice services (PBX), applications (Office365, Salesforce.com), and even infrastructure (Azure, AWS) as “cloud” services. While this solution is not right for everyone, there is usually some cloud offering somewhere that makes sense (and cents).
4. Utilize a Fractional CTO
The Chief Technology Officer (CTO) is the person in charge of refining the strategic imperatives set down by the Chief Information Officer (CIO) and implementing tactical solutions that make the enterprise more profitable and efficient. It’s difficult and unwise to outsource strategic services, but a fractional CTO can offer the benefits of outside experience and perspective, at a reduced cost.
At VertitechIT, our fractional CTOs form what we call the Office of the CTO (oCTO), bringing internal IT leadership together with a fractional CTO to implement current industry best practices that evaluate, diagnose, and transform the department to achieve mission-critical results.
5. Look at Hyper-convergence
On the architecture side, standardizing compute, network, and storage on commodity hardware using software-defined methodologies will also offer up significant savings. Hyper-convergence makes your network more efficient and allows for the elimination of personnel silos as teams of people dedicated to each area now work as one. It also makes them more effective, reducing service provisioning and delivery time from days and weeks to in some cases, just hours.
Hyper-convergence also allows you to scale your storage requirements, buying what you need only as you need it, so “money isn’t sitting on the shelf” in the form of unused capacity.
6. Conduct an IT Audit
Sometimes you need to spend a little money to save more. Through on-site analysis and interviews with key organizational stakeholders, a proper IT audit will marry IT operational goals with current technology gaps. An in-depth review of critical technology areas should include an evaluation against best practices and provide a road map to better leverage IT as a competitive advantage. A complete cataloguing of organizational hardware must include an assessment of condition, expandability, life expectancy, and replacement cost.
7. Implement Telecom Expense Management
Large organizations can process more than 100 telecom invoices every month and many of those bills could be for services that are no longer being consumed. A telecom expense management system (TEMS) is designed to audit where an organization spends its telecom dollars and monitor monthly expenses on an ongoing basis.
The initial TEMS process should include an examination of at least a year’s worth of billing statements along with an accurate inventory of wireless and wireline devices. After questioning actual needs by benchmarking current contract terms and pricing, entertain proposals or negotiate with current vendors for credits and error resolution. Finally, put in place an ongoing monthly expense management system that reports on budgeting, troubleshooting, expense, and usage-related trends.
8. Re-Evaluate your WAN
Wide Area Network topologies are changing rapidly with the introduction of Software-Defined Networking (SDN) technology, allowing the use of multiple circuits in an active-active configuration and dictating prioritization and path selection at the application level. That a real techy way of saying it’s now possible to build a much more resilient network, using less expensive circuits, and you don’t need to employ a Cisco Certified Internet Expert (CCIE) to operate it. Organizations are finding they’re able to reduce their expensive private network bandwidth, augment with less expensive Internet circuits, and provide a better end-user experience for less money.
9. Make Smart Buying Decisions
Should you buy big-name hardware or save a few dollars by going with the less expensive but a feature-equal box from a company that isn’t a household name? Saving cash upfront is obviously appealing, but failing to consider ease of support can come back to bite you.
Everything breaks. Having a company with a robust customer service network will always pay off in the end. Many IT professionals hold on to the notion that “it’s just a box of spinning metal” and the real innovation comes from the software higher up in the stack. But ask yourself one question. When the box breaks, can you use the lowest-paid guy in the company to fix it or find someone who can? If your company isn’t staffed full of programmers and you’re just a consumer of IT, opt for the vendors offering the best support and service.
10. Fire Your IT Consultant
If your IT consultant is just peddling the latest and greatest and not helping you make more money, save more money, or become more efficient, get a new one. Marketing guru Mark Stevens calls it “Extreme Marketing” by forcing you to examine expenditures against the income they produce. He quotes Thomas Watson Jr., one of the great technologists of history (and the founder of IBM), who said when contemplating the future of his company, “nothing happens until someone sells something.” In other words, technical innovation is great but unless it makes you money, go back to the drawing board.
Too often, poor IT investments result from a rush to judgment. As an executive, it’s easy to leave the technical decisions to the technology experts, but IT is not a commodity, it’s a strategic imperative. If your IT consultant isn’t treating it that way, get rid of them.
IT departments are under ever-increasing pressure to control costs. Instead of sacrificing quality or performance – and especially security – use these tactics to spend wisely on initiatives that will save money in the long-term and make better use of IT assets.
Cut smarter… not deeper.