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Reducing IT Expenses

In these days of recession and layoffs, IT managers are facing some tough
decisions. As my own boss put it recently, "if it's a choice between
upgrading our Office suite or laying off some people, what do you think
we're going to do?"

With that in mind, there are a large number of things that an information
technology manager can do to lower costs.

Postpone upgrading software - I know we are all supposed to bow to the
Microsoft Gods, or at least open our wallets, but there is absolutely
nothing in the new Office XP suite that makes it worth upgrading from Office
2000 or even Office 97. In fact, if your company is using any version of
Office it will probably be fine for another year.

The same story holds true for everything else. I would recommend looking
very closely at software upgrades of any kind during the next year or two.
As a manager, I personally find postponing some upgrades much more agreeable
than laying off people.

Renegotiate software and hardware contracts - Look at your contracts. Any
coming up for renewal in the near future? Call these vendors and discuss
lowering the rates. If the salesperson does not cooperate, then work your
way up the organization board until you find someone who does cooperate.

Negotiate hard - Money is tight, so slow down and let time help you
negotiate. When you must purchase something, get bids from lots of companies
and make it known they are in competition. Work them ruthlessly against each
other and you may find rates going down like crazy. Want an example? I had
to purchase an enterprise backup package recently. Prices started in the
$300,000 range, yet I took my time and let the vendors work down their
rates. Within 30 days, the offers were all below the $60,000 range! That's
quite a savings for just a few phone conversations.

Vendors are very hungry these days. For the first time in over a decade it's
a buyers market. Enjoy it while you


can and get some revenge on those
vendors who would not lower their prices last year - make them sweat.

Postpone hardware purchases - I don't know about you, but the pace of
hardware changes during the past few years has been very difficult to
manage. It seemed like we would just purchase 200 megahertz machines when
the 400 megahertz models came out. We'd upgrade, then then 600 megahertz
models were released.

I would recommend carefully considering all hardware purchases, especially
upgrades, for a year or so. Sure, your users may want to upgrade to the
newest 2 gigahertz machines, but I'll bet their 933 megahertz processors are
working just fine.

Look closely at what your consultants are doing - If you use consultants,
this is a great time to very closely examine what they are doing for you.
Honestly look through their project list and question every single item.
Discard projects that are not absolutely necessary, postpone what you can,
lengthen tasks where you cannot postpone. Consultants are incredibly
expensive, and often the tasks they perform can be cut back dramatically.

Renegotiate consulting contracts - This is an excellent time to discuss
rates with your consultants. They may not want to lower their rates, but you
most definitely have the upper hand in this economy. I've been able to get
cuts of fifty to sixty percent lately just by spending a few minutes
talking.

The point is simple. Money is tight and will probably get tighter before
things loosen up. Now is the time to look over everything you do and reduce
those costs. Not only will it help keep people employed, but it will impress
the boss and company managers.


About the Author

Richard Lowe Jr. is the webmaster of Internet Tips And Secrets
at http://www.internet-tips.net - Visit our website any time to
read over 1,000 complete FREE articles about how to improve your
internet profits, enjoyment and knowledge.

 

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