IT's Biggest Money Wasters
"Companies often use paper forms to complete daily tasks or electronic forms that are then printed out (vacation requests, time sheets, bill-back spreadsheets, etc.)," says Selvidge. "Copies of these are sent to another group of people, like HR, after that -- the next step in a long, overly complicated approval cycle -- and finally handed off to the department head. You multiply this by the hundreds of admin tasks that require approval every day, and you can practically see the trees frowning."
Simply converting required forms from paper to digital instantly saved $10,000 for one school in Fremont, Calif., Selvidge says.
Step two: Get employees to stop needlessly printing all or parts of emails, Web pages, or other electronic documents that don't really need to be on paper, says Kent Dunn, VP of sales and business development for GreenPrint, which makes software that helps users conserve paper and ink/toner by avoiding unnecessary print jobs. GreenPrint claims an enterprise with 5,000 PCs will avoid printing some 6.3 million pages, saving nearly $400,000 annually.
Even moving from cutting paper checks to using electronic deposits will save one pound of paper per employee each year, saving employers an average of $176 per head, according to a study conducted by Javelin Research and sponsored by PayItGreen, a coalition of electronic payments vendors.
"There are no magic buttons that an organization can press to solve the print waste problem," says Dunn. "In the end, individuals are responsible for creating print waste, and they have to be involved to make it go away. Once people are engaged, they have to be empowered with the right tools to solve the problem, and then the organization must enforce the print reduction targets it established."
IT's biggest money waster No. 3: Gold-plated service-level agreements
Whether it's for help desk services, Web hosting, or server uptime guarantees, too many IT organizations are paying for Lexus-level service when a Toyota Camry SLA is more than adequate.
"Most sourcing agreements for IT services include amazingly high service levels," says Matthew H. Podowitz, independent IT consultant and author of The IT Value Challenge blog. "But how many businesses really require 99.999 uptime 24 hours a day, 7 days a week?"
That five-nines uptime agreement may mean your site or servers will only be unavailable for perhaps 15 minutes per year, he adds. "But if you paid for only 98.5 percent uptime, and your systems went down for maybe a dozen hours a year, so what?"
Unless that downtime puts you at a competitive disadvantage or causes revenue to slip through the cracks, it probably won't make a difference, he says. There are exceptions, of course. If you're a county government, you don't want to reduce the uptime for your 911 emergency service, but your accounting data probably doesn't need to be accessible 24/7/365.
Even IT departments where labor and outsourcing budgets have been trimmed to the bone can still save money by taking a hard look at their service-level agreements, especially in the area of help desk support, says John Baschab, senior vice president for technology solutions and staffing firm Technisource.
"Overserving particular areas is a big source of overspending in the operating budget," he says. "A hard look at benchmarks and numbers will help here. One specific area that should be evaluated is the help desk or incident management area. Companies would often like to move to a prevention model (e.g., end-user self-service) instead of a cure model, but it can be difficult if you don't already have effective SLA measures in place because as you change models it is hard to tell if you have actually reduced the incidents. The worst case is investing in a preventative model but not cutting down on the total incidents."
The hardest part, says Baschab? Deciding what services are essential and which are merely optional.
"The most difficult part is separating the needed services vs. the 'fat' that can creep in over time," he adds. "This requires careful analysis and considerable experience in benchmarking, IT demand management, service-level setting, and governance."
IT's biggest money waster No. 4: The email monster
You already knew email was a productivity suck, but it also sucks money out of your organization in terms of storage, maintenance, software licenses, server upkeep, and the constant battle against spam, malware, and data leaks. It's a problem that will only get worse.
Netizens sent 247 billion emails a day in 2009, per the Radicati Group, with enterprise email accounting for roughly a quarter of that total. By 2013, email volume will double -- creating a massive storage headache for enterprises.
"Resources consumed by email messages and their attachments are a major concern for many companies," says WillowTree's Douglass. "A 10,000-user organization without mailbox policies consumes an average of 30GB of storage per day from email messages alone."
Using software configurations or an enterprise email management tool in conjunction with an email archive policy can cut storage costs by managing retention, enforcing limits on the size of file attachments, and redirecting users to third-party collaboration tools like SharePoint, where large files can be shared more efficiently, says Douglass.
"Monitoring and understanding the habits of email users and helping them find alternate ways to send, store, and retrieve information can result in significant storage cost reductions and, as an added bonus, increased email performance," Douglass adds.
But others argue that the proper place for email is the cloud, where the rising storage, maintenance, and security concerns are somebody else's problem.
"For companies with up to 1,000 people, having an in-house Exchange architecture is a huge waste," says Gary Bahadur, CEO of KRAA Security. "Email is definitely one of those things that should be outsourced to the cloud. You no longer have to worry about the costs associated with hardware and software licenses, downtime, combating viruses, or emergency calls to IT admins at 3 a.m. A hosted email platform is backed up automatically, has a 24/7 staff, is more up to date on security patches, and is staffed by email experts instead of tech generalists. If you want to save some money, host your email."
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