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Wanted: True tales of successful IT budget cuts!

By Jay Garmon Contributor ·
It's every IT manager's mission impossible: cut the tech budget without crippling technology services. Has your IT department slashed its budget and lived to tell about it? If so, we want to hear your story. Share your smartest IT cost-cutting strategies and tactics in this discussion, and your name (and tip) just might earn a spot in an upcoming TechRepublic download.

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The Kelly Blue Book Approach...

by jeffwm In reply to Wanted: True tales of suc ...

I have seen organizations save hundreds of thousands of dollars a year on new purchases and contract renewals by comparing their pricing levels to that of the market - much like using the Kelly Blue book guide when buying or selling a car. Having conducted hardware and software RFPs and purchases for a number of companies in my past, I have seen how widely pricing can vary for similar products and services.

While it's not always easy to get the information (there are sources and firms that can help), once a selected vendor is presented with meaningful market data, they will often do what it takes to be in line with others.

In my experience, almost any size company can save an additional 15 - 20% on their external IT spending with a tighter focus on vendor spending - without harming these relationships. These funds can then be used for other projects or personnel needs and it helps gain much needed credibility with the financial team.

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Personnel cuts didn't cut "bodies"

by BlueKnight In reply to The Kelly Blue Book Appro ...

When the eceonomy started heading South a few years ago, the CFO asked departments to observe a "soft" hiring freeze, saying that if they really needed to fill positions, they could. Several departments fully staffed themselves, but our CIO decided to take a "hard" hiring freeze approach unless we had an urgent need for a specific talent we didn't already have on staff.

The economy kept sliding and the CFO, having made all the cuts he could to that point to save money, was forced to ask for a reduction in force.

Those departments that fully staffed themselved during the "soft freeze" suddenly found themselves in the unenviable position of having to cut a percentage of their personnel. Since the CIO hadn't hired additional personnel, all he had to eliminate were 9 unfilled positions with 25 to spare.

IT here has survived two personnel reductions and no further reductions have been considered. We still are looking to reduce our IT budget as contracts come up for renewal. Our new CIO has also decided to look at eliminating the mainframe as an option also. I'm not convinced that's a real fine option, but...

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play off vendors for services

by jims In reply to Wanted: True tales of suc ...

I play hardball with existing vendors and then play them off against incumbents. For example if I have a T1 line now and it costs $750. I let another vendor bid it. If the other vendor bids it for $600 then I inform my existing vendor of my impending change to another vendor. Then I let them beat that price. Sometimes it takes a couple of days. Sometimes it takes a couple of months but I always win. It's always best to win before you change to another vendor because then there is no change to your network or users so it does not take much effort save significant amounts of money per year. I do the same with server and software purchases. I always let the competitors know what the other companies are bidding. I even show them the bids and then I watch the prices come down. Usually a couple of the vendors have put in quite a bit of time and have lost out so they're not happy but that's the way it is. I know it seems cruel but I save alot of money by playing off vendors against each other. Lastly I save by bringing services in-house. I.E. I perform level 1 and leve 2 phone system support in house and then bring in the external vendor for higher level functions.

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Save by delaying upgrades

by rvs In reply to Wanted: True tales of suc ...

Microsoft is really pushing their Software Assurance program. For roughly twice as much money as just buying their software outright, SA allows you "free" upgrades for two to three years. However, I'm not convinced that our firm needs to do upgrades that often.

The new features of Microsoft Office 2003 and Longhorn aren't impressive enough for me to believe they'd significantly increase our productivity (we're still using Office 2000 just fine, thank-you very much).

By not upgrading Microsoft Office or Windows XP, we'll even be able to maintain on our current hardware, we won't have to train users on new products or troubleshoot new bugs. Thus, we avoid unnecessary software upgrades, operating system upgrades, hardware upgrades, technical training, and downtime from troubleshooting newly discovered programming bugs.

For our small firm, this saves us tens of
thousands of dollars each year without degrading productivity or effecting our bottom-line.

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Tight Budget

by jrisner In reply to Save by delaying upgrades

When our organization was expanding and IT work was becoming more abundant, we saved money by appointing a power user in each Dept. this user would be given simple tasks they could perform. Since every Dept. has an individual like this anyway it helps save us time and the company money by not having to hire more IT Staff. One example of the tasks would be to have the user responsible for loading paper in certain printers.
Another thing we do is to maintain, upgrade and repair our own equipment. We have gotten up to 6 years on PCs and over 10 years on certain printers.

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another option

by apotheon In reply to Save by delaying upgrades

Another option, when upgrade time rolls around, is to consider moving to Linux solutions where that is practical.

In fact, if you're holding out on the OS on a given server (for instance), and you get to a point where it's just not giving you the performance you need any longer, you might be looking at getting new hardware. At that point, the common decision is to simply get a new machine with a new Windows OS already installed on it. You may very well be better-served by installing Linux on the same old hardware, or even on older hardware you might still have lying around. Often, you can get far better performance (particularly for servers) out of older hardware with Linux, as compared with Windows machines.

That's especially the case, considering that you can always get the newest versions of (almost) any Linux distribution for free, and the newest versions will often include all the relevant features that the newest Windows has, and more relevant features/functionality as well.

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