The Squeeze: Wringing Cost Out of IT

CIOs are continually charged with reducing the cost of IT. Here are effective ways to achieve that goal — while improving IT services.

Reducing the cost of IT

Two percent. That’s the median growth in IT operational budgets this year, according to a study on North America IT spending by Computer Economics.1 What’s more, capital spending gains are negligible and IT headcounts are rising only marginally.

In other words, even if your IT budget wasn’t cut, now more than ever, you need to make the most of what you have.

Percent of Organizations Increasing IT Ops Spending
“Normally, flat budgets wouldn’t be a huge problem, but device populations have tripled,” notes Dan Stone, CompuCom© chief executive officer. “In the past, end users had only a PC, which IT provided and managed. Today, users have a PC or laptop, a tablet and a smartphone. So now you have to procure, manage and support up to three devices with the same budget. It’s that hidden strain on flat budgets that creates the most pain for IT departments.”

The situation isn’t likely to improve. Less than two-thirds of organizations are increasing their IT budgets. Nearly one-quarter are actually decreasing their budgets. Netted out, only 39 percent of organizations are expanding IT operations spending — the lowest proportion since 2013.2 (See Figure 1.)

More for Your Money

There are strategies for getting the most out of tight IT budgets. Stone recommends five key areas where careful approaches can lower costs while simultaneously improving IT service delivery:
 

  1. Device management — Desktop and mobile devices cost organizations plenty. Even in bring your own device (BYOD) environments, the wrong device in the hands of the wrong end user can carry a larger lifetime price tag than it should. The solution, Stone says, is end-user personas.

    A persona is a detailed definition of a specific group of end users with similar IT needs. By carefully defining personas and assigning every end user a persona identity, you can reduce costs in several areas.

    For example, you can see to it that all end users are using the best-suited, lowest-cost devices for their roles. You can make sure their devices are loaded only with the applications they need, saving licensing costs. And you can track support issues by persona, uncovering hidden costs by identifying, for example, that a set of end users needs better software or more training.
     
  2. Mobile access — If you have mobile devices, you need a corporate wireless plan. But telecom providers don’t offer much plan flexibility. You may end up with long-term, rigid contracts — and pay for more mobile access than you actually use.

    The solution is to work with an IT service provider who can buy mobile access in bulk from the telecom provider and then repackage it in smaller, more flexible offerings. “CompuCom buys voice and data in bulk from AT&TTM,” Stone explains. “We then offer organizations short-term contracts in custom-sized end-user increments at wholesale prices.” That way, as employees join or leave your organization, you can quickly ramp up or ramp down your mobile contracts — and not pay for mobile access you’re not using.
     
  3. Connectivity backup — IT organizations know that system downtime can cost enterprises huge sums. But one aspect of business continuity that often gets overlooked is internet connectivity in geographically dispersed locations — especially stores, physician offices and the like. When these links go down, companies can’t process payments, their operations grind to a halt, and costs add up fast.

    The solution is connectivity backup. Stone advises a bundle of hardware, connectivity and services, including:
    • Uninterruptible power supply (UPS)
    • Wi-Fi router and 4G backup connection
    • Firewall
    • Around-the-clock monitoring
    • Notification of outages to your IT team or telecom provider

    Stone reports that a major retailer that used this approach reduced annual store downtime to less than seven minutes and saved more than $11 million in costs.
     

  4. Walk-up IT services — Walk-up centers are on-campus locations where end users can get face-to-face help with devices, applications and connectivity. While face-to-face support might sound more expensive than a traditional service desk, Stone says the approach can save money in several ways.

    First, it can make support technicians more efficient. A global pharmaceutical company is using CompuCom’s Solution Café® walk-up service centers to help support staff handle twice the incidents compared to standard methods, reducing costs by 25 percent.

    Second, it can get employees back to work faster. End users are often able to resolve issues faster through face-to-face interaction. “Getting a corporate executive or major-accounts salesperson or hospital surgeon back up and running quickly can save your organization large amounts of money,” Stone points out.

    Finally, end users are often happier with walk-up centers. While they’re getting one issue resolved, they can ask questions about other common IT problems they might face. The pharmaceutical, for example, increased end-user satisfaction with IT support by 10 percent.
     
  5. Asset disposition — How many consumers have a drawer full of old cell phones they don’t know what to do with? Multiply this by 1,000 or 10,000, and you get a sense of the challenge organizations face with asset disposition. Those idle devices can cost you in real estate, data-security risks and tied-up device value.

    Stone advises that organizations work with a service provider on IT asset management. Such a service should be end-to-end, starting with a “birth certificate” documenting procurement and configuration and concluding with an auditable “death certificate” at device end of life. Asset disposition should include secure shredding of device data, refurbishment and resale of sellable devices, and environmentally responsible disposal of devices too old to resell.

If your IT organization is like many, your budget isn’t likely to increase much in 2017. Your challenges probably will. But by addressing key areas like device management, mobile access and IT support, you can stretch your dollars further — and actually improve IT services in the bargain.

 

1, 2 “IT Spending and Staffing Benchmarks 2016/2017,” Computer Economics, 2016
CompuCom® and Solution Café® are registered trademarks of CompuCom Systems, Inc.
AT&TTM is a trademark of AT&T Intellectual Property.
All data cited in this article is used by permission.

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