In the current economic climate, characterized by recessions and layoffs, IT managers are grappling with difficult decisions. As one executive recently put it, "When faced with the choice between upgrading our Office suite or laying off staff, which option do you think we'll choose?" With this in mind, there are numerous strategies that IT managers can employ to reduce costs.
While it may seem necessary to keep up with the latest software releases, it's important to question whether these upgrades are truly essential. For instance, there's little in the new Office XP suite that justifies an upgrade from Office 2000 or even Office 97. If your company is using any version of Office, it will likely suffice for another year.
This principle applies to other software as well. It's advisable to scrutinize any software upgrades closely over the next year or two. As a manager, postponing some upgrades may be a more palatable option than laying off staff.
Take a close look at your contracts. Are any due for renewal soon? If so, reach out to these vendors and discuss the possibility of reducing the rates. If the sales representative is uncooperative, escalate the matter until you find someone willing to negotiate.
In a tight financial situation, it's crucial to negotiate effectively. When making a purchase, solicit bids from multiple companies and make it clear that they're in competition. By pitting them against each other, you may find prices dropping significantly. For instance, when purchasing an enterprise backup package, starting prices in the $300,000 range can be negotiated down to below $60,000 within a month.
In the current market, vendors are eager for business. It's a buyer's market, so take advantage of this opportunity to negotiate better deals.
The rapid pace of hardware advancements can be challenging to keep up with. It's not uncommon to purchase 200 megahertz machines only to have 400 megahertz models released shortly after. Therefore, it's advisable to carefully consider all hardware purchases, especially upgrades, for the next year or so. While users may want to upgrade to the latest 2 gigahertz machines, their 933 megahertz processors are likely still adequate.
If you employ consultants, it's a good time to closely examine their contributions. Review their project list and question every single item. Eliminate projects that aren't absolutely necessary, postpone what you can, and extend tasks where postponement isn't an option. Consultants can be costly, and often their tasks can be significantly reduced.
Now is an excellent time to discuss rates with your consultants. They may be reluctant to lower their rates, but in this economy, you have the upper hand. It's possible to achieve cuts of fifty to sixty percent just by spending a few minutes negotiating.
In conclusion, with money being tight and likely to get tighter, now is the time to review all your operations and reduce costs. Not only will this help keep people employed, but it will also impress your superiors and company managers.
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