Using an IT budget to reduce service costs
I closed part 2 of this topic by saying that the next steps were to look at opportunities to reduce this spend and suggested that this can be achieved in 3 ways:
1) Reduce the level of service (therefore reducing support costs)
2) Look for opportunities to move services / procurement to a supplier which offers better terms / value
3) Re-evaluate the need for the spend
So far we have identified where our costs come from and have also planned a budget for 3 years. Now we get down to the real rub of this article, reducing our costs! To do this we are going to use a simple evaluation path:
Step 1 – Record the level of service you need
Step 2 – Record the level of service you are currently getting / paying for
Step 3 – Evaluate the difference
Step 4 – Evaluate your current supplier against the requirement
Step 5 – Find at least 2 other suppliers and get comparable quotes
Step 6 – Evaluate the cost vs service difference
Step 7 – Decide your new service provider, cost and service level
So the first example: I have a hosted website which cost me £40 per year for unlimited web space, bandwidth and sub domains. I also pay £25 a year for visitor analysis, £5 per year for their website building tool and £40 per year to have my website submitted to the major search engines.
Step 1: I can identify the amount of space my website uses and looking at my stats I can also calculate the rough bandwidth per month needed. I now build my own site so I do not need their site building software and I am happy that my site has been indexed by the main search engines and they are visiting it regularly to keep up to date with the content. My stats analysis show that the majority of my visitors come from Google therefore all of the other “secondary websites they advertise are not really needed. I still need to analyse my visitors so I know where they are coming from. Within the web hosting service I also want good server availability and good customer service (in case I have a problem or question).
Step 2: I am getting 99.95% quoted availability with a real availability running at 99.995%. Customer service has been good and the web space and bandwidth are unlimited. The other service items are as indicated above
Step 3: In terms of bandwidth and web space I am paying for a service over the odd’s of what I need. The search engine submission is no longer required and the website building tool is not required .
Step 4: My supplier offers a lower band hosting package (power user) which will half my annual hosting costs and still provide me with the web space and bandwidth required to meet my requirements. I am happy with the service uptime and the customer service I am offered
Step 5: Other hosting companies can offer a comparable service in terms of price and service. My saving here if really in pounds against downgrading the service with my current service provider. The stats service can be found on-line by other companies. There are both free services (e.g. Google Analytics) and chargeable services (such as Stats Counter). I do not need the website building tool or search engine submission service
Step 6 & 7. Looking at both of these together my decision is as follows:
1) Web hosting service – I have downgraded my service to a power user which still fits my capacity requirements and have saved £20 per year (£60 over my 3 year budget). I have stayed with my current supplier due to their customer service history and good uptime
2) I have dropped the cost of the website building tool and the search engine submission as these are no longer needed. This has saved me £45 per year (£135 over 3 years)
3) I have trialed Google Analytics for 3 weeks and am happy with the data if gives me against my “paid for” stats service. The service is very similar and the data I do lose access to is really fringe and not really used by me. I am therefore going to cease the paid for service at a saving of £25 per year ( £75 over the 3 years). By evaluating my website hosting service and the associated items I have maintained the level of service required (even thought I have reduced the level of service that I was actually paying for) and have saved £90 per year.
Now this is a small saving and a simple example but hopefully it has started to demonstrate how the process works and how understanding your IT costs and evaluating the service you get and require can lead to a saving.
Can we help you reduce your IT costs? Why not make use of your 2 hrs free consultancy to start this process?
