Networking

Budget tips: How tough negotiating saved one manager $184,000

Are you struggling to find more pennies to trim from your ever-tightening budget? Your fellow members at TechRepublic are here to help. Read how these money-saving tips may help you save thousands.


Who knows where the U.S. economy is headed? With a number of companies failing to reach their quarterly profit projections for early 2001, budgets at organizations everywhere are being cut or scrutinized closely.

If you need to maximize the funds in your IT budget, or if you have training or special projects you want to preserve, several TechRepublic members have tips to help you achieve these goals.

Here are strategies sent in by TechRepublic readers:
  • Take a look at your telecommunications contracts and methods and renegotiate for a lower cost.
  • Shop around when buying new hardware and consider refurbished equipment.
  • Protect your training plans by purchasing vouchers for training from your training vendor at the beginning of the budget year.
  • Offload some customer technical support like FAQs and product updates to the Web.

Read on to see what these tips did for others and what some of these managers did with their savings.

Save $184,000 on an ISP contract
Joseph DeLuise has been reading about the competition in the ISP market and how access costs have dropped. As director of technology services for Howard Systems International in Stamford, CT, he reexamined his current ISP contracts and went shopping.

  Doing More with Less
    Do you need creative solutions for stretching your IT dollars and making wise purchasing decisions? Check out our collection of articles for advice on outsourcing, planning projects, working with vendors, and increasing efficiency.  
       

    Do you need creative solutions for stretching your IT dollars and making wise purchasing decisions? Check out our collection of articles for advice on outsourcing, planning projects, working with vendors, and increasing efficiency.  
       

He found much better prices for his 14 T1 circuits elsewhere and went back to his current provider and said, “Look, we want to stay with you but looking at these other providers, we think we’re being taken advantage of.”

Even though Howard Systems International was halfway through a two-year contract with their ISP, the ISP agreed to reduce the rate about 27 percent if the company would sign another two-year contract.

Those 14 circuits are scattered throughout the country, DeLuise said. Based on the price of the Stamford monthly connection dropping from $2,100 to $1,500, the company would net a savings, over two years, of $184,800.

DeLuise doesn’t mind locking in the price for two years because he doesn’t think it will ever be lower than it is now.

He plans to use these savings to continue upgrading hardware and software at the company.

“It’s more of a security blanket so we can continue what we are doing now,” he said.

Save $3,000 on a server
Another example of how shopping around can net a tidy sum comes from TechRepublic member Bruce Mizell, server administrator at Ocean Design, Inc. in Ormond Beach, FL.

“We had orders on a 1U Dell 1550 Server to act as our new primary domain controller. It would cost about $5,900. The reason was to save money. We’d buy the less expensive 1550 instead of buying the more upgradeable 2U 2450 (list about $7,000),” Mizell said. It turned out there would be some technical difficulties with using the 1550, so he started looking at Dell’s refurbished servers for a 2450.

“I found a 2U 2450 configured as needed, actually more than needed, for about $3,600,” Mizell said. After it arrived, he removed one of the unneeded 18-GB disk drives and used it to upgrade the company’s mail server, which needed more space.

“We saved about $3000, have a better, more upgradeable PDC, and upgraded our mail server—all at the same time by spending a little more time shopping,” Mizell said.

He took the money he saved by shopping around and rolled it over into his next quarter’s budget, making it possible to start a project earlier than planned or to buy needed equipment.

“Either way, you come out looking good,” Mizell said.

Save $10,000 on training costs
Sometimes, coming out of a budget crunch unscathed takes advanced planning and execution.

Matthew Addiego, director of information technology at Cytogen Corp. in Princeton, NJ, uses his training budget in two ways:
  1. As a buffer against budget cuts, he budgets more than he needs in training, and that is the first place he hits when he has to cut.
  2. He arranges with his training provider to buy training vouchers that can be used all year, but the actual expense is charged at the beginning of the budget cycle before it can get cut.

Addiego uses New Horizons for his training needs, and when he buys a year’s worth of training vouchers from them, he saves about $250 per $1,000 worth of training. Also, through another deal with the same company, he can pay about $10,000 for a year’s worth of training to take one employee all the way through their MCSE training and usually through a few advanced classes.

With the money Addiego saves from cutting a training deal like this, he can afford to finance projects that weren’t included in his original budget.

“You can map out the costs of the equipment and software you will need to replace in the coming budget year, but what about the gadgets you want to try out?” he asks.

Something tried and true
Member Corey Russell, assistant manager of support for WinCare in Medford, OR, reminds us of a cost-saving technique that shouldn’t be ignored.

“A few years ago, we had a Web presence but no technical support area on our Web site. We were mailing new releases, sending patches via modem (which incurred long-distance charges), and via regular mail. In addition, we would often get the same calls (about the same issues) over and over,” Russell said.

The company already had a Web site, so Russell began putting patches, new releases, and an FAQ page on the download page of the site. This addressed customer needs and saved the company lots of money.

“Our call volume on our 800 number dropped more than half after putting the troubleshooter on the Web,” Russell said.
TechRepublic loves to hear how you save money for your organization. We’d like to hear more of your stories about how you saved your budget and what you did with the money you didn’t have to spend on something else. Start a discussion below or send us a note.

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