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The hardest question I get asked when working with boards is “what should I do with IT”. Directors and managers are nervous about sales people pulling the wool over them and committing to an expensive program. We have also seen organisations reacting in illogical ways in tougher times to their IT spend.
Jeff McCulloch, President of Yeo & Yeo Computer Consulting, LLC and a member of the Leading Edge network, which Polson Higgs are affiliated to, recently produced an article highlighting how directors and managers might think about this problem. Here are Jeff’s thoughts.
With today’s economic challenges, organisations continue to look for any and all ways to reduce expenses. As companies struggle to align their budgets, one of the first cost-cutting measures is to eliminate jobs. While it may be a quick fix to the bottom line, it’s not exactly the best solution because cutting valuable resources typically results in unmotivated employees, weakened quality control and unsatisfactory customer service.
So, what if there were other areas within the organisation to reduce expenses without having to cut valuable resources? Technology, a crucial component in running an efficient and productive company, is the second highest budget item (human resources is number one). Yet, it is possible for organisations to reduce IT expenditures while increasing the efficiency of their IT infrastructure and sparing their most valuable resource, their employees.
Here are 10 ways that organisations can control costs and find cost-cutting opportunities within their IT programs.
1. Go green.
A comprehensive IT assessment of an organisation’s overall “greenness” often identifies areas that waste energy and cost organisations thousands of dollars. Quick cost savings and improved energy usage can often be discovered through consolidation, virtualisation and equipment upgrades. Another ‘go green’ initiative: turn off power to equipment when not in use.
2. Consolidate.
Whether it is servers, storage, network equipment or all three, reducing the amount of capital assets through consolidation is backed by numerous advantages including:
- a higher level of service
- boost in efficiency and greater control over operations
- the flexibility to respond to constantly changing business requirements
- reduced cost of ownership
While this can be a major project for an organisation to undertake, the potential cost savings is so great that a consolidation strategy should not be overlooked.
3. Virtualise.
An organisation can realize a 60 to 80 percent increase in efficiency by introducing server virtualisation into its IT infrastructure. Virtualisation can also reduce energy costs by up to 80 percent.
4. Upgrade.
Keeping the entire IT infrastructure (hardware and software) up to date increases productivity, reduces down time and ultimately saves money.
5. Use managed services.
Managed services can simplify IT operations and reduce investment. They provide organisations with predictable monthly costs, access to best-of-breed IT and the latest applications—all without the costly and painstaking need to overhaul IT systems regularly. Managed services also provide 24/7 support, allowing IT personnel and business owners to focus on strategic issues.
6. Control print costs.
Paper, toner, cartridges and service are a huge and largely uncontrolled expense. Print technology has changed so rapidly that color printers younger than about 4 years old produce copies cheaper per page than older printers do. How can you improve productivity and dramatically reduce an organisation’s total cost of printing?
- Upgrade to more efficient printers
- Centralise the print environment
- Take advantage of inclusive cost-per-page programs
7. Implement a disaster recovery plan.
Simple and affordable disaster recovery solutions are available that ensure timely recovery in the event of a disaster. Part of the solution should include a regular data backup plan with off-site storage. And, test the backups frequently – they too can fail.
8. Conduct an IT assessment.
A comprehensive IT analysis identifies areas of inefficiency and risk, and recommends opportunities for areas of improvement. The recommendations help organisations plan for short- and long-term changes that can enable the reduction of overall IT costs and better use of IT resources.
9. Improve business processes.
Leveraging technology to optimise key business processes results in lower costs and higher revenues as well as motivated employees and satisfied customers.
10. Train employees.
Well-trained employees get more done in less time.
The list Jeff has provided is a great base to start thinking about these issues. If you would like to discuss how this might relate to you please contact our IT manager Shane Boyle at shane.boyle@ph.co.nz
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Last updated: 12th November 2010 | 9:11 am
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