Getting Your Money`s WorthBy Eric Guckelberger and Mary Beth Kush | Posted 2009-09-24 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
Ten ways IT can earn its keep.
How will your IT organization continue to deliver consistent levels of service throughout this time of belt-tightening and economic uncertainty? Here are 10 proven ideas that can help ensure you are getting the most “bang for your buck.”
1. Ensure vendor compliance with contractual pricing. Review the charges on your recent vendor invoices and ensure that they are consistent with the negotiated terms of the contractual agreements. Ad-hoc review of the invoices can uncover not only billing errors, but also opportunities for future cost avoidance through policy change or contract renegotiation. Additionally, you should proactively manage contracts by taking advantage of the periodic agreement renewal cycles to ensure that the terms and conditions are consistent with the expectations of the organization. Leverage knowledge of the most favorable industry-standard terms in the negotiation of the agreement renewals.
2. Benchmark costs. Compare your spend on commodity products and services with organizations with a similar size and complexity. Objectively comparing the costs of services may provide the needed justification when establishing yearly budgets, as well as unearthing specific opportunities to optimize spend.
3. Leverage buying power. Con-solidate vendors to increase your buying power. Consider various alternatives, which may include using leading service providers for a particular type of product or service, as well as one-stop vendors that provide a spectrum of products and services. Ensure on-boarding, renewal and off-boarding policies and procedures, and adequately address the disposition of the physical devices.
4. Identify training options contained in agreements. Another aspect of agreements that’s commonly overlooked is the inclusion of training provisions within contracts and agreements. Utilizing the identified training options increases the value to the organization and supports the career-development goals of staff members.
5. Evaluate mobile voice and data services. Review the current mobile device policy (including voice, data and wireless broadband), contracts and service providers. Understanding the current usage profile of mobile device users—as well as future usage profiles—will help achieve a balance between expenditures and business requirements.
6. Accurately measure business functions. Ensure the greatest return on investment of core business functions by optimizing the processes, leveraging complementary tools and identifying opportunities for future process improvements.
7. Review program performance. Evaluate programs through the projects that make up those programs or initiatives to ensure they are meeting the stated objectives—within budget and on time. Assess each individual project’s objectives to ensure consistency with the current program goals and identify unnecessary efforts. Realigning or proactively ending unnecessary efforts will save money and strengthen the organization’s position. It also will increase the pool of valuable resources to projects well-aligned with the organization’s goals.
8. Prepare for a software licensing audit. Gaining a true understanding of your organization’s software licensing requirements—including the number of installed instances and versions of software—can avoid fines from potential software audits. Adequately preparing for software audits prevents exposure to potential fines and minimizes the level of effort needed to address any unexpected vendor-initiated software inquiries. Plus, unused licenses can sometimes be reallocated to employees who really need them.
9. Assess outsourcing options. Determining the feasibility of outsourcing is an integral step in making the best decisions for the organization. Clearly and completely defining the services, service-level requirements and the internal cost to provide the services—prior to identifying the vendors for consideration—allows for a more realistic comparison between the offers of various service providers.
10. Implement IT asset management. True IT asset management involves more than simply tracking assets through their life cycle to ensure your hardware is covered by a support or maintenance agreement. IT asset management can address regulatory compliance, contractual compliance, vendor management, contract management, licensing genealogy and more.
Cost savings and avoidance are attained through the effective tracking and management of an asset (tangible or intangible) from procurement through disposal; ensuring vendors’ inventories are accurate; making sure agreements are favorable to the organization; and avoiding fines from the improper disposal of hardware.
Effecting cost reductions within an IT organization can be a difficult prospect. However, utilizing the approaches above can increase service value through a reduction in costs, while maintaining the service levels expected by the business.
Eric Guckelberger is a manager and cost optimization expert and Mary Beth Kush is director of performance management at Acumen Solutions, a business and technology consulting firm based in Vienna, Va.