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IT Brown Bagging - 10 Tips to Lower your IT Expenses Now.

Find Huge Savings in your Business Now

A great quote from Warren Buffett, the legendary American investor and industrialist, summed it up well for managing a business in a economic downturn when he said "....you ought to conduct your affairs so that if the most extraordinary events happen, you're still around to play the next day". Whether we are in a recession or not, I think it is safe to say that the dirty "R" word still lingers in the back of small business owners minds. One interesting point about recessions is they can teach us some incredible lessons on how to get our business in proper order. In good times, balance sheets tend to get a little bloated, especially the expense column.  When tough times arrive, companies switch to defensive mode and start trimming costs. Cost-cutting programs should not be a one time event.  Spurts don't work. A really good small business owner does not wake up one morning and declare to cut-costs anymore than he practices walking.  "R" word or not, IT management providers can find innovative ways to help small businesses to lower IT expenses and keep production levels up. According to research firm Gartner, cost cutting is not over in 2010, 75% of companies are thinking about it.  Small business IT service providers have to find ways to intelligently reduce these expenses without damaging core business functions.

Here are 10 cost-reduction tips for small businesses to lighten the expense load on balance sheets.

1. IT Financials - First step, is to know the numbers.  If you don't know the numbers where are you going to start trimming expenses.  Total of Ownership (TOC) is a start but not the end game.  You must include all hard and soft costs.

2. Reshuffle & Recycle - With reductions in staff headcount, place the power computers with high octane staff.  For retired equipment, recycle it.  Gain some tax donation dollars and contribute to a good cause. We use The Tommy Nobis Center in Marietta, GA.  Find a local center and partner with them.

3. Renegotiate Rates - These are quick wins.  Contact your Telecom providers, equipment leases, co-location centers and renegotiate the rate.  You might still be paying old tariff rates which are unusually high.  We helped clients lower monthly rates by 43%.  Huge savings to be gained in this area.

4.  Invoice Verification - You can only expect what you inspect. Examine IT related invoices every month.  Be on the look out for hidden services and junk fees that get slipped in.

5. Reduce Software Count - This is a big one.  With reduced staff count, not all software licenses are used. Contact your software vendor and attempt to renegotiate your contract. Massive savings can be found with industry-specific software like Accounting packages or CAD applications.  Also, adjust support subscriptions to the new license number.  

6. Flat-Fee Society - Are you still paying for IT services by the hour?  If so, it's time to switch to a flat fee solution.  Flat, fixed monthly fee solutions lock in your monthly and annual IT support budgets.  No more laboring over IT providers' invoices and reports to ensure you are not over-paying.

7. Keep Enron Out of Business - This is an easy fix.  Shut down workstations, monitors, printers, plotters, copiers, voip phones, and other non-critical systems every night.  We saved a client $2,300 per year by this simple step. 

8. Insourcing is a No-No - Using internal staff to support and repair IT issues actually costs more than its perceived savings. This is the most common mistake among small business owners. Staff folks are revenue-generators not expense-savers.  Unless you have no business coming in the door, you can make a case. Otherwise, when an employee wrenches on another employee's computer, guess what - your loss of revenue is multiplied by 2.  Also, your salary meter is still running also times two. IT labor arbitrage is not a cost savings strategy.  

9. Desktop "Junk" Policy - "My machine runs slow"; "My system keeps locking up"; "I have pop-ups".  Sound familiar? These are largely caused by employees installing non-business related junk apps. Slow downs and downtime is simply not an option today.  Put preventions in place to keep employees from harming their systems.

10. Reduce Pulp Use - Paperless office is no longer a pipe dream.  Find ways to eliminate printing.  Start emailing reports, proposals, and invoices.  Good savings all the way around the office here as well.

These quick fixes can improve the bottom line fast. If setup and managed correctly, a company's IT operations should be a profit center not a dreaded line item costs on the balance sheet. 

Please let us know your thoughts in the comments section below.