Introduction
Every business is unique, so there is no standard way to apply IT cost reduction techniques.
Many SMEs outsource some or all of their core IT to external service providers and this is often the most cost-effective way to operate. Choosing the right suppliers and ensuring the services are aligned with your current and future business needs are key.
There are lots of ideas around for trimming IT costs and the trick is to find the ones that work best for your business.
IT cost reduction guidelines
Managing IT costs is more of an art than a science and is often far from straightforward. It is more than just shopping around for a product or service at the lowest price. In practice there will be a mixture of known and hidden costs, variable costs and cross-dependencies, depending on the size and nature of the business. These could include service charges for managing infrastructure and hosting email & web sites, equipment costs, software licence costs and sometimes people costs. We can work with you to analyse your IT costs and identify potential savings.
Opportunities for reducing the IT costs within your business will depend on a number of factors. The “what”, the need to control and reduce your IT costs is clear. The “how” is all about finding ways to reduce costs without having a negative impact on the business. It may be straightforward to implement small scale reductions quickly and easily. Generally, larger savings will be more challenging and take longer to achieve. Larger businesses often have more complex or diverse IT needs, or multiple premises to support.
Desktop refresh
Look to extend the life of your desktops and laptops, but take care that it fits with your policy and plans for the operating system, support and any critical business applications.
The results of a recent worldwide survey by Microsoft showed that 74% of business computers are still running Windows XP on hardware having an average age of 4.4 years. This highlights that adoption of Windows 7 has so far been slow and many business are not yet convinced of the benefits. We advise you to avoid running legacy versions of Windows wherever possible (Windows 95, 98 & 2000).
Purchasing IT equipment
Aim for best value over the life of the computer - whether it be a desktop, laptop or server - and not just the initial purchase price. This usually means aiming for mid-range - be careful to choose a reputable supplier and product, and avoid going for the cheapest. This may turn out to be more expensive in the long run, particularly if the item has a low specification and/or the warranty and support expires after one year.
What to do with your old computers
End of life desktops and laptops that are remain reliable are useful in helping the business. For example, staff working from home, as office hot swaps, or where additional desktops are need for temporary or causal staff.
End of life servers may also have a place by downgrading their role from production to test and development, or using in non-critical roles where failure may have little or no impact - for example, as a backup domain controller or secondary DNS server.
Using free applications and services
Review what commercial applications you are using and identify where there could be a cost benefit from switching to alternatives. Consider using OpenOffice, Google Applications or other web-enabled services.
There is a vast wealth of freeware, shareware and open source software available at little or no cost. Products need to be selected carefully, but many are of a professional standard and suitable for business purposes. This is a good way of reducing your software licence costs.
Server consolidation
Many servers are not fully utilised and the server management overhead grows with the number of servers. It is now common practice to host multiple virtual servers on fewer physical servers. There are well defined benefits in terms of costs, system resilience and meeting the green agenda. However, this will require investing in a visualization product (eg. VMWare ESX, Microsoft Hyper-V or Virtual Server; there are also
freeware products available).
Network links
Almost all business premises need external network connectivity. This will range from broadband lines offering Internet access to dedicated lease lines, the price usually increases with the speed of the line. There may be opportunities for rationalisation and price reduction, particularly if there are multiple lines or premises in different geographic locations. It will be cost advantageous to include voice and video communications, and telephone services. Voice over IP (VoIP) solutions will often be more cost effective than traditional telephone services. The ability to integrate communications and data services can bring additional business benefits and offer greater flexibility.
Free VoIP applications such as Skype can provide voice calls, video communications and remote desktop sharing. There are also cost-effective ways of enhancing the audio quality.
One last question on networks: does your business still need those aged and expensive fax and ISDN lines?
Benefits of cloud computing services
There are new opportunities to reduce the cost of running a local IT infrastructure to provide services to your business. Cloud services are hosted and managed remotely on the Internet and offer an economy of scale at the national or global level. Core IT services such as email, data storage and business applications are available at minimal or no cost. There are global players such as Google, Microsoft, SalesForce and Amazon, as well as many UK and other specialised service providers in the cloud services market.
