As we continue to become increasingly dependent upon information technology (IT) in the day-to-day operation of our businesses, the complexity of that technology is likewise increasing. It’s quite literally ever changing. Given that most organizations are struggling to keep abreast of new developments with an already stretched staff, how can organizations optimize their IT resources, reduce IT costs, and continue to innovate to meet growing service level demands? Here are several opportunities to consider.
Validate the service-level agreement between IT and the organization
Too often, organizations are disappointed with IT’s value and cost, but neither IT nor the users ever agreed to what level of services they required or at what cost. For example, agree on response time and resolution time for the different types of requests the IT help desk will receive. Determine whether IT staff should be centralized or decentralized. Identify “hidden” IT resources and costs in your budget. It’s crucial that IT and the organization can mutually agree on where and how IT resources will be optimized and what costs are appropriate or need to be reduced.
Evaluate the design, capacity, costs, and service levels of your data and voice networks
If not documented, document the design of your networks; obtain assistance from your network service providers if necessary. Review bandwidth and speed against the needs of the organization, and review the service agreements in place, including costs and expiration dates. Opportunities may be available to renegotiate agreements to better align capacities and costs with required service levels.
Review your organization’s strategy for business application software
If you’re using one or several commercial vendor packages and are considering replacement within the next year, or if you aren’t seeing value from the vendor’s support or recent upgrades, you might consider eliminating annual maintenance at the next renewal date. You may also have a significant amount of custom-developed software that you’re retaining internal IT staff or external resources to support. If you’re considering replacing the software, this could provide an opportunity to reallocate internal, or discontinue the use of external, support resources. In addition, consider consolidating or standardizing applications across divisions/departments where appropriate to reduce support costs. Be sure to perform a thorough review of costs and functional requirements before selecting a strategy, as the selected direction can have a significant burden on personnel and financial requirements, not to mention the ability of your software to support the daily operations of your organization.
Assess the skill sets and compensation levels of IT staff
Given the growing pressures in IT, many departments are being asked to provide IT professionals who aren’t only technical, but also possess the business and behavioral competencies their organizations/users require. This skill migration is a significant undertaking toward increasing efficiencies and becomes the catalyst for training efforts, transitioning certain staff, considering outsourcing options, and evaluating performance measurement systems. Given the amount of change in position and skill requirements, compensation should be re-evaluated.
Consider the use of external IT resources
Outsourcing certain IT functions can increase service levels and reduce costs. Often, organizations are outsourcing aspects of IT that are common in industry and don’t provide them any competitive advantage or differentiation (e.g., PC and server software and hardware support). In other cases, organizations utilize external technical resources when they need a network redesigned or installed or a unique software application custom developed using a technology with which their staff is unfamiliar. Be sure to establish a service-level agreement with each service and staffing provider.
Institute discipline in your IT help desk function
In addition to project work, help desk activities are the other major category of IT staff activities (usually 60 to 70 percent). Many organizations are spending too much staff time managing and responding to help desk requests. Typically combined with realignment of IT support staff, implementing help desk software with request logging, asset inventory, and trend monitoring will help IT improve its service levels at a lesser cost.
Assess IT’s success in managing major IT projects/initiatives
Though project work typically constitutes 30 to 40 percent of IT’s activities, the rest of the organization usually equates the value of their IT department with the results of their project work. Sure, users should be leading/co-leading many of an organization’s projects with IT, but IT should certainly promote the use of a repeatable method-ology for planning, executing, controlling, and reporting project work. IT should also work closely with the lead user(s) in developing the financial justification for a project so IT resources aren’t being allocated to low value projects. IT is evolving rapidly, and many organizations are finding it difficult to keep up. If your organization is dissatisfied with the value or cost of IT or would like to discuss how to do more with existing resources, please contact Doug Hockenbrocht at 800.544.0203. We’re helping many organizations realize significant cost savings while increasing their IT service levels.
For Your Consideration
Here are a few things to consider to reduce costs and optimize IT resources:
- Establish service-level agreements
- Evaluate data & voice networks
- Review application software support & maintenance
- Assess staff skill & compensation
- Utilize external IT resources
- Promote help desk efficiency
- Ensure project management effectiveness
How We’ve Helped — Data & Voice Network Optimization
Plante & Moran reviewed the network of a manufacturer/retailer consisting of 14 sites. Executives were concerned with spiraling IT costs in spite of poor network performance. Our investigation uncovered a variety of serious data network issues, many exacerbated by partially deployed plans initiated by previous IT management but never communicated to the new management.
Plante & Moran effected several changes immediately while others had to be phased in as carrier contracts expired. Upon our arrival, the organization was incurring annual WAN expenses in excess of $120,000. After implementing our immediate recommendations, this figure was reduced to $80,000 and, within a year (as contracts expired and further changes could be implemented), annual WAN costs were on track to decline to approximately $25,000.