Helping IT Save Money ... and Jobs?

An anonymous reader asks: "I work in a small, overworked and understaffed IT department at a profitable business. We recently got the news that we needed to cut costs. While every penny counts, simply turning off the computers at night and saving pennies on processor cycles isn't exactly a noticeable savings. I'm curious what measures other Slashdot readers have taken to save money within their IT departments."

Comments

Linux & OpenSource

[Supp0rtLinux]

I know, I know... call him a Troll. Actually, I saved my company upwards of $15,000 a year by not renewing software and support contracts for our Nokia firewalls and instead replacing them with Smoothwall (a Linux firewall). I was even able to install Smoothwall onto the old Nokia IP350 hardware.

I also avoided upgrade costs to XP for about 10 of our 50 systems. This last year, we upgraded all from Win2K to XP. However, 10 of the systems were only used by temps, contractors, and consultants and only for web browsing, webmail, etc. So we installed FC3 on them saved the almost $200 each on XP upgrade licenses.

Oh, and I save the whole company countless amounts of money when I installed Firefox and set it as the default browser. Pop-ups went away, re-installs resulting from spyware went away, etc. It saved my time (not having to do re-installs and system restores) and end-user times (not having their system unusable while I fixed them).

Re:Outsourced Ourselves

[way2trivial]

you don't know much about it then.
http://tinyurl.com/47c8e/
read up here

Canada: Safe, secure and 'near-shore'
It's about as close as you can get, and its low risk and relatively low prices make Canada a favorite destination for "near-shore" outsourcing.

The Philippines: Low cost, but higher risk
The second most popular outsourcing destination after India, the Philippines has a highly skilled, English-proficient workforce and low cost.

Mexico: It's Close; It's Cheap
Just a short plane ride from the U.S., Mexico boasts a well-educated workforce and lower prices. But the lure of jobs in the U.S. keeps turnover at outsourcers high.

Ireland: Comfort and Convenience at a Higher Cost
Its government is eager to offer tax benefits and grants to companies willing to bring IT work here, making Ireland an increasingly popular destination for software maintenance and development work.

China: Low-level work at lower-than-average cost
Low cost is driving some users to outsource IT work to China, where low-level programming resources can be found at bargain rates.

Singapore: Small but powerful
This small Asian locality has economic stability and a highly trained workforce on its side. But those strengths come at a price.

Vietnam: Nascent capabilities but low cost
A "country in progress," Vietnam offers low labor costs but faces some communications and modernization challenges.

Malaysia
An emerging outsourcing player, Malaysia has invested heavily in a high-tech corridor to lure international business. But a sluggish economy and small workforce have slowed the country's momentum.

Brazil
Brazil is well known for the bossa nova, string bikinis and Amazon forests. Less well known is that, by many measures, it?s one of the world?s major countries. It ranks fifth in both geographic size and population (180 million people) and has the world?s eighth-largest economy.

Russia and Eastern Europe
Its IT workforce is low-cost and highly trained, but Russia's abundant scientific talent remains largely untapped because of government bureacracy and image problems.

Selecting the Right Offshore Vehicle
Opinion: Columnist Bart Perkins says there are different types of offshore outsourcing vendors, and it's wise to pick the type that fits your company culture, requirements and risk profile.

Re:Every Penny Does Count

[SharpNose]

When you're looking at this sort of thing, you have to make sure you know the difference between eliminating things that represent sunk cost and eliminating things that are not sunk costs yet. It's the latter that you care about; you only care about the former to the extent that they're firmly attached to the latter.

Fembots here talks about saving three SQL Server 2000 licenses; well, you don't get to cash those licenses back in or resell them, so that's a rather empty gesture, although he/she'll avoid any renewals that might be associated with the three licenses.

Some costs are per-user: desktop operating system licenses, desktop app software licenses, desktop machines, MS client access licenses. If your company has expansion plans, get rid of those costs by using Linux, Firefox, OpenOffice, etc. and inexpensive beige-box semi-disposable PCs instead of paying so much just for the letters D, E, L, and L. If you're real good at setting up application servers under Linux, you can use junkers (down to P/90) as desktop systems and your users won't know the difference. If this is a company in trouble and being able to scale up operations is one way the biz managers could solve the problem, DON'T sabotage the effort by adding on so much of your own expansion costs.

If you needed DBMS software, you were being irresponsible with your company's money if you didn't evaluate PostgreSQL to see if it would do what you needed and went with MS SQL Server or Oracle just on the basis of the name.

If I were your IT manager, I'd already be doing these things, but I'm not, so what I think you should do is listen carefully to any discusions about how the line-of-business managers might want to fix things and do your damndest to help them succeed.

Re:Every Penny Does Count

[Syncdata]

Don't let inkjet printers in the office AT ALL. They are a constant headache and steal more in support costs than ink.

While we're talking about printing, check some of the software to see what's being printed, and how.

Where I worked, the software package by default printed a light grey background along with whatever actual data was being printed. Changing the background to white was a seemingly trivial change, but since the organization prints reams worth of paper every day, the drop in toner use/cost was extremely noticible.

you want a diagnosis without giving symptoms

[avi33]

Without trying to sound too snarky (there's plenty of that posted already) it's really hard to say without knowing what you're spending your money on. There are huge industries out there that will do this for you (and say, pocket 50% of the savings as a fee) so keep in mind that in asking Slashdot, you get what you pay for. I've been through similar circumstances at past employers, and there are a few easy places to start looking.

• Identify where your biggest costs are. Services? Licensing? Personnel?
• Go for the big fish. Saving $200 per workstation for the entire enterprise will create a lot of work, headache, retraining, and frustration. Merging servers to kill off a few licenses will require time and effort, but with a verifiable ROI.
• What services do you use, outsourced, ASP model, or otherwise? You would be surprised how willing your vendors might be to renegotiate terms, even mid-contract. Take the approach of "You're not just a vendor, but also our partner in this business, and you have a vested interest in seeing us succeed. Act like a partner and we'll have a long lasting profitable relationship for both of us. If you refuse to work with us on this, we will waste no time in looking for your replacement when the contract is up." We renegotiated a number of contracts like this, and a couple that wouldn't budge? They were out the door.
• Determine what your core responsibilities are (to the business). Use a minimum of hardware, services, and personnel to reach that goal (in the short term). If you are serving as the "junk drawer" for the entire organization, they will cut their costs and pass the responsibility on to you. Until you quantify exactly what your role is, you won't be able to push back and say "If that goal is important to your department, then you need to find a source to fund that project." Suddenly everyone's pet projects aren't so important when they have to chip in for them.
• You need to manage expectations, as in, you won't noticeably lower the electric bill before the end of the month, but you can say "2006's budget is $50,000 lower due to the licenses that we won't need to renew." Document how you have been able to cut costs, if possible without cutting service. You will probably be faced with a midlevel executive who will say "Okay, now you really have to tighten that belt." You need to be prepared with a statement like "We've tightened our belt 25%, and we can tighten it an additional 25% if we stop supporting projects x, y, and z."
• Personnel decisions - Not to advocate layoffs, but if you're keeping someone around at $90k to do a single job that can be outsourced for $30k, you should outsource it. Ideally, you'd bust your ass to make sure that person was shifted within the company, where their talents could be used to provide more services and capabilities to the company. Again, not to incite a flamewar, because it's a complex and sensitive issue here, but it's probably too late for that.
• On the flip side, for the past couple years, the market is quite ripe to replace agencies with independent contractors. You need to be skilled at finding the good ones, and managing the projects.
• Further beating the dead horse: licenses, services, and personnel.

Re:The Numbers Fallacy.

[TheCabal]

Is the company making every penny count? No, they're actually wasting money by working inefficiently. They wasted a lot of my time, then tried to buy a workstation I didn't need. But the numbers look good.

At a previous job, the IT budget was on a permanent freeze. In the three years I was with the company, we had only made one major investment in IT, and that was at the beginning of my tenure. Now, we were an Application Service Provider, so our lifeblood was in our servers and how fast we could crunch numbers.

Did I mention that the major investment in servers, all the servers were bought off of eBay and other second-hand vendors?

So I'm dealing with four year old servers, with outdated hardware this is just slowing down more and more, while we are getting more and more customers, and larger customers. I tried explaining to the Powers that there is a fixed number of cpu-hours, and it takes X hours to process customer Y on our current hardware. We were operating at something in excess of 90% capacity. I gave several pleas to free up some money to acquire some faster, more robust servers, thereby reducing X, allowing us to handle more Y.
But as IT is commonly held as a cost center, I got the usual "we don't have the money". I left the company eventually, but heard they hit a hard brick wall as the production environment was saturated almost 24 hours a day- the couldn't bring in any more customers. Sort of ironic that a company can get killed by its own success.