As IT services providers ourselves we are advocates of the benefits of outsourcing. Technology is vital to the success of any business – IT can help businesses increase efficiency; improve services and ultimately their bottom line. However in the current climate we understand that businesses are under increased pressure to reduce their IT costs.
Cost cutting needs to be handled with care however. Rather than a blanket cost cutting regime, businesses need to look at ways of reducing costs without necessarily reducing operational efficiency and in turn their competitive advantage.
Radical cost-cutting may answer short-term needs but can lead to higher future costs as projects that could improve efficiencies are delayed or cancelled. For businesses, it is vital to measure hardware, software and servicing not on cost alone, but in the context of performance and quality.
Top 6 Tips for effective IT cost cutting
1. Consider IT staffing
How productive is the individual? What staffing levels are needed not just to maintain but to improve service delivery? Are your per-capita cost/performance ratios better, the same or worse than other companies in your market sector and against industry best practice?
2. Outsourcing – get the price right
Analysing outsourcing costs is even more challenging than planning internal cuts. Businesses often feel they are overpaying their IT service providers but can’t pinpoint how much or why because of the lack of pricing transparency in the contract. Costs can increase because the client wants customised services or because their IT environment is highly complex.
In such cases, we would encourage businesses to think about standardising application platforms, eliminate redundant desktops or rationalise service centres to save money.
3. Choose the right service package for your business
Sometimes businesses automatically request a premium-level service where a standard one would suffice. Discuss with your supplier what elements of your package are essential to your business and make redundant all those which are unnecessary or have little or no effect on your business. Then try to negotiate your contract costs on this basis.
4. Plan in advance
Sometimes businesses may need a job done in a rush whatever the cost. To save money, businesses should be encouraged to plan ahead. At Supreme Systems we hold regular IT Audits with our clients to try and ascertain their plans for the future and make recommendations where possible as to how we can help them achieve those goals.
Always check with your providers on the cost implications of doing work under time pressure.
5. Improve Existing Systems
Your PCs may not be running as fast as they should be but this does not necessarily mean you need to purchase new PCs. You may simply require a ram upgrade or checking to see that your systems are not infested with viruses. Compare the costs of buying a new PC (a good PC can cost anything from £300 – £600) to upgrading your RAM (a 2GB memory upgrade can cost as little as £60) that alone is a saving of between £240 and £540!
6. IT Illiterates Cost You Money!
In our experience there are two types of IT Illiterates that cost businesses money.
IT Illiterates Type 1 – Staff who happen to have some knowledge of IT but are not necessarily employed to fix IT problems. A study carried out by City &Guilds found that the majority of small businesses (59%) rely on staff with no official IT role to sort out daily computing problems. Businesses with six to 10 employees were the worst offenders, with 65% relying on non-specialised staff members to put in extra hours to fix IT issues.
More than one-third (35%) of workers have failed to get a job done on time due to lack of IT knowledge and trained support, the study found. More than half of these workers (54%), tried to solve their IT problems themselves, potentially leading to more problems.
“In many companies, IT issues are passed on to existing staff in an attempt to keep costs down,” Ken Gaines, City & Guilds’ product manager for IT user qualifications, said in a statement. “However, without proper training, novices can end up costing companies far more in terms of productivity levels.”
IT Illiterates Type 2 – The Friend of a Friend or the IT Novice. We recently received a frantic call from a business owner. Their email system had stopped functioning and they had been unable to receive emails for three days. As a manufacturing company, their email system was vital to their business as the majority of their business was from international clients. During our initial systems audit, we discovered that their exchange had been set up by a “good friend” who was well experienced in fixing IT issues – unfortunately he was currently on holiday and was unable to fix the current problems. On further investigation of the email set up we were amazed that the company’s email system has managed to survive for so long! Our belief is you get what you pay for and the MDs’ assertions that “he does our IT for a pint” spoke volumes.
The IT Novice – (theory trained with no real industry experience) is another IT Illiterate that should come with a health warning. We call them the IT Cowboys – who position themselves as experts in their field. You know the type. He excelled in the Open University IT Systems course and believes this is enough to set up his own IT support business – with no real industry experience, should you really trust this person with your systems? Nothing beats working with a real IT professional that is able to tender solutions quickly and effectively due to their experience. I know of one “IT Support Company” who uses consultants from another established IT provider to fix his clients’ IT issues because he simply does not have the skills himself to carry out a satisfactory fix (yes we are advocates of outsourcing but this is ridiculous!). This means that he is unable to respond to clients queries quickly and he also passes on the cost of recruiting outside consultants to his clients. What began as a cheap IT contract is now costing his clients far more than they imagined. Our advice? Always go for quality – experts over novices. If you can never get an instant fix to your problem and instead you get the “we will get back to you” spiel; if you are leaving messages for your support provider and they are taking their time to get back to you; if your onsite technicians are constantly changing (and they have little or no knowledge of the company they “work for”) beware you may have a novice on your hands!
Contact Supreme Systems now on 0800 001 5942 or email us at firstname.lastname@example.org to see how we can help you with your IT Support needs. With support packages starting from as little as 26p per PC per Day, cost cutting will soon be a thing of the past.