IT maintenance, upgrades and new implementations are necessary expenditures for any business that wants to stay relevant, compliant and competitive. Unfortunately, they can also be very costly and and rife with opportunities for overspending. In today's uncertain market, IT leaders and purchasers often struggle to find a balance between reducing IT costs and keeping the organization's IT systems current and effective. Suspending projects or cutting new investments may save money in the short-term, but it will inevitably hurt the business in the long run.
The best way to avoid a situation where business is impacted by budget cuts is to find ways to reduce costs during the actual purchasing process. Arming yourself for negotiations and having a clear plan will go a long way in allowing you to invest in the technology you need without overspending. Remember the following before your next purchase:
1. Your existing vendor may not be the best
Vendor loyalty is important and may even come with some added discounts. But it never hurts to shop around to make sure you are getting the best deal on your new investment. Comparing vendors can also give you some valuable leverage when it comes time for negotiations.
2. Don't overbuy
Many vendors will try to sell you packaged bundles with all sorts of services. While this may seem like a money saving solution at first glance, you will likely end up paying for services and support that you don't really need. Make sure you only sign up for items that you will actually use.
3. Benchmark pricing
The best thing you can do to save money on IT purchases is to know what fair market value is on the items you wish to buy. Without this knowledge, you will certainly pay too much.
4. Decrease excessive support
Not every IT solution will need premium support, but vendors will try to sell you on the highest level if you aren't certain exactly what level of support you need. Knowing where you can scale back on support can mean big savings.
5. Annual maintenance increases are not mandatory
Vendors will often try to increase maintenance fees every year and tell you it is standard practice. If you agree to these annual increases, you are overpaying for service.
6. Keep the future in mind
Always remember to make purchases that will put you on track for your 12-18 month goals, not ones solely based on what you need now. Keeping these future goals in mind will set you up for success as your business grows and changes.
The best way to avoid a situation where business is impacted by budget cuts is to find ways to reduce costs during the actual purchasing process. Arming yourself for negotiations and having a clear plan will go a long way in allowing you to invest in the technology you need without overspending. Remember the following before your next purchase:
1. Your existing vendor may not be the best
Vendor loyalty is important and may even come with some added discounts. But it never hurts to shop around to make sure you are getting the best deal on your new investment. Comparing vendors can also give you some valuable leverage when it comes time for negotiations.
2. Don't overbuy
Many vendors will try to sell you packaged bundles with all sorts of services. While this may seem like a money saving solution at first glance, you will likely end up paying for services and support that you don't really need. Make sure you only sign up for items that you will actually use.
3. Benchmark pricing
The best thing you can do to save money on IT purchases is to know what fair market value is on the items you wish to buy. Without this knowledge, you will certainly pay too much.
4. Decrease excessive support
Not every IT solution will need premium support, but vendors will try to sell you on the highest level if you aren't certain exactly what level of support you need. Knowing where you can scale back on support can mean big savings.
5. Annual maintenance increases are not mandatory
Vendors will often try to increase maintenance fees every year and tell you it is standard practice. If you agree to these annual increases, you are overpaying for service.
6. Keep the future in mind
Always remember to make purchases that will put you on track for your 12-18 month goals, not ones solely based on what you need now. Keeping these future goals in mind will set you up for success as your business grows and changes.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT expense reduction consulting solution
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