3 Critical Strategies that Extend your IT Budget
By Kirk Waddell, EVP of Technology, One Source
Many IT leaders and teams are facing budget constraints for the remainder of 2020 and into 2021. With impact of COVID-19, and the transition to a remote workforce for many organizations, agility is more important than ever. Having the capabilities to upgrade your IT infrastructure generates greater productivity, efficiency, and competitive advantage during this time of crisis. The demand for innovation is not slowing, so how do you continue to advance and support remote workers despite budget constraints?
Below are 3 creative strategies proven to uncover cost-savings in hard to find places so you can keep up with the demand for innovation:
1. Asset Management
- Challenges: Stop wasted spend and untangle your unmanaged assets. Many organizations fall victim to mismanagement of their device inventory and end up paying for devices that they no longer use – sometimes for years. According to One Source data, 15 percent of the amount spent on an organizations telecom and IT needs is wasted on mismanaged or unused assets. It is easy to recognize the wasted spend in the IT budget, however fixing the problem is time consuming and requires a lot of manpower.
- Solution: Many organizations do not have the team or the time to track down the unused assets, so they find a partner who can uncover these assets for them. A partner who specializes in asset management already knows where to look to uncover unused assets and can quickly resolve these issues. Identifying mismanaged assets can be a quick win for an IT team and the cost-savings realized recur year to year.
2. Find An Alternative To An Aggregator
- Challenges: The aggregator model is an alternative to working directly with facilities-based carriers. Facilities-based carriers are limited in their geographic footprint and the complexity of managing multiple carriers across multiple locations of an organization is challenging. Aggregators offer simplicity by negotiating wholesale contracts with the facilities-based carriers. An aggregator provides organizations with consolidated bill pay, help desk and becomes the single-point-of-contact for an organization to combat the frustrations of an organization managing facilities-based carriers on their own. However, this wholesale model limits an organization’s options. Because the organization does not go directly to the facilities-based carriers, they miss out on promotional pricing, access to an extended product portfolio and experience prolonged operational times for services such as repairs and new installs. An aggregator model offers simplicity, but not necessarily best practices.
- Solution: To overcome the limitations of the aggregator model and avoid the management of all the facilities-based carriers on their own, organizations have been transitioning to partners who allow them to own the relationship with the facilities-based carrier. These partners keep the contract between the facilities-based carrier and the organization itself to get the benefits of promotional pricing, access to the extended product portfolio and reduced operational times for support services that are otherwise inaccessible if the organization goes through the wholesale model. The partner manages these contracts on behalf of the organization and can then provide the same benefits of an aggregator such as single-point-of-contact, help desk and consolidated bill pay. This transition offers the same simplicity as an aggregator while also reaping the benefits provided by the facilities-based carriers, ultimately realizing recurring cost savings by avoiding wholesale.
3. Understanding Your Contracts
- Challenges: Despite dispositions due to COVID-19, service providers are holding organizations to their contracts. These contracts tend to be complex and come with revenue and asset level commitments, making it difficult for organizations to make carrier or technology changes without incurring liability charges.
- Solution: Understanding how to unpack an entire contract allows an organization to have more flexibility in their options. There are common structures to look out for, such as ensuring that contract effective and end dates are associated with the MSA as a whole rather than being tied to individual assets. This allows an organization the flexibility to bring on new, additional services without liability fees instead of managing multiple contracts tied to single assets that have different end dates. Contracts tied to single assets make it difficult to make changes without breaking the contract and paying the liability fee. Additionally, it is beneficial to add a technology clause to the contract. This clause would allow an organization a period in the contract term to explore updated technology and product options to keep pace with the ever-changing technology landscape. Finally, ensuring the contract contains a business turn-down clause allows an organization to terminate services with locations that have closed or downsized without liability charges. Unpacking an organizations contracts can be time consuming and require manpower, however there are partners who specialize in finding cost-savings in contracts that are an option to organizations.
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