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Cutting IT Costs: A Software Change May Be “Just The Ticket” To Trim Your Bottom LineCopyright © 2008 Clark TannerCurrent economic trends are forcing more and more companies to look for creative ways to reduce spending. When Senior Management decides to cut the budget across the board, even IT departments feel the crunch. That is why CTO’s and IT Directors now have a new mandate. They must scrutinize every dollar they are spending, and make a decision as to what expenses are tied to “must haves” versus “nice to haves”. Typically, upgrades to IT infrastructure are not likely to end up on the chopping block. Industry leaders like Dell are finding that servers and storage devices are still selling, while PC sales seem to be slowing down. High powered servers with increased data storage capacity seem to be the order of the day. Yet, there is still a directive from the CEO to cut costs. This leads to the dilemma many technology managers are faced with.... “Where do we tighten the belt?” Cutting Software Expenses: What about software expenses? Many software packages often have huge costs associated to yearly support and maintenance agreements. These contracts, having long been considered to be “fixed costs,” are now subject to closer review as well. Even the IT department’s customer support software must be taken into account. Makers of high-end solutions, such as BMC (Remedy) and HP (OpenView) are requiring their customers to pay premium rates (annually) in maintenance fees, resulting in what for many companies is a huge percentage of their IT budget; only to repeat and increase every year. This brings us back to our earlier mention of “must haves” versus “nice to haves”. Oftentimes, companies utilizing these mammoth solutions are not taking advantage of the robust functionality the packages offer, yet they are paying huge amounts of money every single year in order to keep the application maintained (including the components that are not being used). Many companies find that they either do not need all of the functionality of these monstrous programs, or that the software is too complex for their staff to configure and learn. Not only was the initial investment a huge expense, but the ongoing cost of software support could easily top $300,000.00 in just a few years time. The question is, are the software “nice to haves” really worth it? What if these fixed costs could be reduced substantially, while still having the foundational tools needed to perform daily tasks and all those dollars could be reinvested back into new technology, or to replace old outdated PC’s? Is there really a way to cut costs and still have a strong and reliable request management (Service Desk) system? A Wise Alternative in Today’s Market: One possible answer to this current dilemma is to consider replacing a costly, existing Service Desk (ticketing) solution with one that is more affordable over the long term. For instance, compare the Total Cost of Ownership (TCO) of a package such as Novo Solutions’ Service Desk software with BMC’s Remedy. In five years time, the Remedy customer could spend $750,000.00 to $1,000,000.00 plus, when you add the initial purchase price, cost of implementation, training costs, and 5 years of maintenance charges. A comparable package from Novo Solutions (with a few less bells and whistles) would cost around $75,000.00 to $90,000.00 (including the initial investment, implementation, training and 5 years of maintenance). For many Remedy users, the up front cost of purchasing the Novo Service Desk Software is less than their annual Remedy support renewal, resulting in an immediate savings. The Bottom Line: In a climate where tough decisions are being made to cut costs, a closer review of these numbers causes one to rethink whether or not it is wise investment to implement and maintain pricy applications like Remedy or OpenView when such comparable and affordable alternatives exist. Changing to an alternate affordable solution allows daily essential support tasks to continue “business as usual” while the money saved can be substantial. About The Author:
*** Digital Reprint Rights *** *** Author Notification *** We ask that you notify the author of publication of his or her work. Clark Tanner can be reached at: marketing@novosolutions.com *** Print Publication Reprint Rights *** If you desire to publish this article in a PRINT publication, you must contact the author directly for Print Permission at: marketing@novosolutions.com
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