There are right ways and wrong ways to save IT costs. Then there are also just plain ugly ways.
The role of the solution provider is probably the most crucial in the area of helping organizations, regardless of size, invest in the right technology and avoid wasting precious dollars.
Many companies adopt a strategy of delaying IT purchases or implementations during tough economic times in an effort to keep spending at bay. The problem here though, can be twofold.
First, there are certain technology investments or upgrades that will actually that will make an organization more efficient in the long run and keep it competitive. Companies also need to ensure their systems and data are secure at any cost, as any breach not only can put its customers at risk but bring down the entire company.
Secondly, before cutting spending, IT first needs to evaluate its current systems, software, services and—perhaps most importantly—its upgrade cycle. Solution providers need to help their customers first take stock of their technology environments, eliminate waste and unnecessary equipment and services and help prioritize their IT spend and upgrade cycles moving forward.
In fact, a recent research report by Forrester Consulting, on behalf of Network Hardware Resale, said despite strong efforts by businesses to reduce unnecessary IT costs, many of these companies miss out on big IT cost savings each year by prematurely upgrading networking infrastructure and insufficiently scrutinizing ongoing maintenance contracts.
The study revealed that 76 percent of IT decision makers are concerned about reducing IT costs, but many are not aware of the available options that exist for alternative maintenance contracts and are way too influenced by vendors regarding hardware refresh cycles. Here is where the solution provider's role needs be more defined. Solution providers have an enormous opportunity to step in the gap and help their customers prioritize their upgrade strategies.
Other study results revealed:
- Up to 79 percent of organizations refresh their wired networking infrastructure every one to five years, guided by industry averages that originate from their vendor partners.
- Vendors set the end-of-life agenda, resulting in the sometimes unnecessary and expensive replacement of IT equipment that actually still carries market value and has 20-plus years' mean time between failures.
- End-of-life equipment is prematurely retired, with 85 percent of respondents admitting that they would have kept their legacy networking equipment if the vendor continued to support it.
- OEM maintenance services have little return on investment, with more than 80 percent of organizations buying maintenance contracts from their equipment manufacturer even though they see little value in what they are purchasing and express discontent over misrepresented cost savings, new fees and inflexible pricing models.
The end result is that even though IT budgets are under constant pressure, most organizations are wasting money on unnecessary upgrades and maintenance. And guess what? These recommendations are coming straight from the vendors themselves.
Solution providers need to work with their customers to keep what is working within their existing infrastructure and avoid premature upgrades. They need to help them comb through their existing maintenance contracts and help put ROI metrics in place.
There are good ways, bad ways and just plain ugly ways to cut IT costs. Solution providers need to be Clint Eastwood in these situations, not Eli Wallach or Lee Van Cleef.
Knock 'em alive!