Cost savings in technology today.
The First Steps
Many organizations have adopted a very simple approach to cutting technology expenses by cancelling projects, reducing the staff and stopping system upgrades. This is typically a prudent tactic to rapidly reduce overall short term costs. It is also fairly simple to identify and eliminate non-critical items from a budget for a series of short term cost reductions.
The Second Round of Cuts
As this economic downturn continues, decisions and strategies involving technology spending have larger and longer term impacts on your business. Technology vendors and customers have both enacted further reductions in areas like reducing the depth of skilled employees, employee benefits, education, maintenance and eliminating positions.
The Creative Steps
This next area requires careful consideration and creativity. A mistake here could cripple critical business processes, impede its ability to rebound or endanger the security and integrity of systems.
The following are typical of our creative steps that resulted in keeping quality high but significantly reducing and deferring expenses…
Case 1: Study the problem, Standards, Centralization Establishing standards then adjusting the purchasing process
An organization was purchasing Microsoft software in an ad-hoc manner which resulted in multiple issues. Purchases were being made at retail costs rather than volume discounts. The enterprise’s purchases were not being tracked by Microsoft so a compliance audit was generated. No credits were being accumulated for training of the staff. Internal licensing documents were being saved in various ways which resulted in incompatibilities and an ever-accelerating user demand for version upgrades.
A brief study was performed to determine the owned and distributed versions of Microsoft’s products. Business upgrade needs, end of life support dates and upgrade volumes and costs were also evaluated to determine a versioning strategy that would meet the organization’s needs.
The centralization of technology purchasing was the best value solution but only if it was done in concert with a comprehensive need-driven software version upgrade strategy.
An overall policy for software upgrades was created that projected both the timing and volumes required to meet the organization’s needs. Volume agreements with improved pricing, support and training were negotiated for the organization. This solution deferred approximately $425,000 of license upgrade expenses, made the company compliant with software licensing, and provided the organization with volume discounts on all future purchases.
Case 2: Backup system cost avoidance and reductions
A corporation was not backing up its information in a consistent fashion. Remote offices were at risk of losing critical business information. The capacity of the backup facilities at the main datacenter was being exceeded. Off site storage and retrieval costs were rapidly growing at all three remote sites.
Business requirements were gathered and proposals to manage the global backup requirements through technology purchases and/or outsourcing were obtained. The cost range was between $175,000 and $450,000 for a five year period. The business management team was engaged to determine if a change in its stored critical business information was feasible.
A rework of policies and business processes delayed the need for any technology expenses in this area. The organization agreed that in order to avoid investing between $175,000 and $450,000 in upgrading its backup systems, they would have to change their backup strategy to centralize their business critical and financial data into their main datacenter (which was already consistently backing up critical data). Remote office backups were no longer data-critical so they could be dramatically reduced and made manageable. Policy changes were also introduced to adjust the frequency of non-production data backups at the main datacenter. This significantly reduced tape system loads and eliminated the need to invest an additional $75,000 in backup capacity. Off site storage of backup tapes was also changed to storing these tapes in existing local business facilities in a secure and controlled fashion which eliminated approximately $21,000 annually.
Case 3: Project management - what's the best method?
Large and complex projects often distract the entire management team away from the critical day-to-day issues that arise during the course of the project. They are stretched to the burn out point and beyond.
The split focus can result in a degradation of critical services and response times, a backlog of routine but required work, a patchwork of temporary fast fixes that must be revisited and re-accomplished once the project is finished. But the normal complex project completion usually becomes the real "starting point" of the support and stabilization part of the project and it takes on a life of its own.
The BTCG offers two solutions:
External management of complex and critical project:
Or the temporary backfilling your critical permanent positions:
IT Compliance and Incident Response:
How well will your current computing and networking technologies help you achieve the company's top priorities? What additions, improvements and changes are necessary in the near-term, medium-term, and long-term?
Your Infrastructure Direction needs to consider the health of existing infrastructure components and their suitability in the future of the enterprise. We can 1) Assess Current Technical Infrastructure and 2) Develop Technology Strategic Direction.
Infrastructure Direction should be revisited periodically, at least annually, or when there is a significant course correction in corporate direction
IT Continuity Planning:
IT Resource Management:
- HR Management
- Professional Performance Management (20/70/10)
- Managing Vendor Performance
- Contract Negotiations
- Selecting and Evaluating Vendors
Technology Policy and Procedure Management: