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The key point I'm trying to make is that you can improve your company using IT without having to spend money on a whole lot of new hardware or software. Just by refocusing the energy of IT, you will build a company that will come out of economic low-points stronger than when it went in.
During economic low-points, it's time to start looking inside your company to find ways to save money.
One easy place to gain immediate cost savings is in Information Technology (IT). One problem in determining what needs to get cut is that most decision making executives do not have a full understanding of what encompasses IT and therefore cannot effectively foresee the effects of cost reduction decisions. If a distributor is lucky enough to have a competent IT department head, then rest assured that he or she will have the know-how to get you through this recession without compromising your IT integrity. If not, then this article should give an executive or a novice IT department head some ideas on what to do.
Dropping the Axe
There are two basic ways to reduce cost in IT: place a moratorium on IT purchases or reduce staffing. Each method has its own pros and cons.
Budgets
You can drip red ink all over the IT budget, but it can cost you more money in the long run. The number one budget item that can come back to haunt you is software licensing. You need to stay current with the number of purchased software licenses in your company to avoid an unexpected sticker-shock in the future. It's too easy to just borrow a software CDROM and install applications on multiple computers. This is especially true in smaller companies. If you continue to use the software without purchasing a current license for each computer, then this is considered software piracy and could easily amount to tens of thousands of dollars in federal fines. Not only that, your company may build a dependency on using these pirated copies of software. So when you eventually "come clean" and become "legal", the bill to immediately purchase these licenses can be enormous.
The number two budget item is software upgrades. If we are in the "batten down the hatches mode," then we don't need to be making great leaps and bounds in technology. We need to coast by on what we have. Software upgrades contain new features that improve upon the previous version of the software. Vendors will charge you for these new features. However, if there is a critical problem with a particular software package, then the vendor will usually make free fixes available regardless of maintenance or warranty agreements. So, if you are currently using a software package, then you can probably get away without the extra bells and whistles of an upgrade for a little while and save money by not taking that leap to the new version. Another area of savings you will realize by not upgrading software is on implementation and training costs. It does take time to upgrade new software and it takes even the most experienced users some ramp up time to return to the same productivity levels as before the upgrade.
So how can you be sure about what to cut and what not to cut from an IT budget? The easy way to find this answer is to as your self this key question:
"Can the basic functions of our daily tasks still be performed effectively without this hardware/software?"
For example, if you have been tracking the check-in/out of corporate assets with a sign-out sheet on a clipboard, you probably don't need to spend a few thousand dollars on that whiz-bang-barcode-XML-web based-over bloated- asset tracking-thingy that someone saw in an airline magazine. The basic function of tracking who checks- in/out items is still there and it works fine ("If it ain't broke, then don't fix it"). However, if the addition of a switch (network hardware) to your network was planned to support ten new offices going online, then this is a necessary expense because workers in these ten new offices will not be able to perform their daily tasks without access to the network
Staffing
I'm not an HR person and I never claimed to be one. I am in essence a tech guy who has at one point spent the Christmas holidays working eighteen-hour days and sleeping under laboratory equipment because of staffing reductions. So here is my two cents on the issue from a project management point of view.
Be very careful of IT staff reductions. Expertise is difficult to come by and can be expensive in the forms of time and money. It takes time to learn the nuances of certain IT systems and that knowledge is never instantaneously transferable. If you no longer have expertise in-house, then be prepared to pay top dollar for an IT consultant where your bill will rise proportionately to how unique the IT system is. Your best alternative to staff reduction is to attack the IT budget as described above and refocus the energy of your current IT department.
Refocus IT Checklist
Refocusing the direction of the IT department is the best way keep everyone happy and improve your business. Many IT departments are "fly by the seat of the pants" types and overlook some of the details in basic day-to-day operations. Here are a few tips to get IT headed in the right direction during this recession. The best aspect is that these steps cost next to nothing except time, and you have everything to benefit.
Best Practices Housekeeping
There are a lot of things you should be doing, but in reality you're really not. Performing a few little housekeeping tasks will provide you with plenty of smooth seas for sailing.
- Create and Maintain an Asset List. There should be an asset list that describes every piece of hardware and software owned by the company. There should also be an associated list that contains every set of software applications (including versions) installed on each computer in your company. Among the many uses for this information, a few important ones are for maintenance, upgrade planning and software licensing verification.
- Archive Vendor Data. Warranty information for computers, copies of software PO's, software license documentation, and original software distribution media should all be kept in one place and managed by the IT department. This enables IT to resolve computer and vendor issues quickly and accurately.
- Update Documentation. In-house user manuals for custom applications and procedures often get forgotten when a new feature or new method for doing something is added. Update the documents from the point of view of a new employee, so you could just drop the document right in front of them and they would be off and running with no questions.
- Re-organize Folder Hierarchies. Users tend to be messy with where they leave data. When data is stored on file servers, organized file structures soon turn into a chaotic mess and it can become impossible to find documents. Take time to re-organize the data out there so that the folder hierarchy makes logical sense for the users to navigate. Perhaps also tighten down security roles to help reduce clutter.
Use Your Applications
Your company may have the latest software application or the oldest software application. Either way, you are probably only using between 20% to 80% of the software's capabilities.
- Investigate Features. Explore your application by clicking around the menus to see what they can do. I've given a number of demonstrations where, as an aside to the demo, I happened to use a feature that I thought everyone knew existed. Yet, I get a lot of "wow, I didn't know you could do that" responses to what I took for granted. For example, one of the most overlooked and powerful features in Microsoft Word is the combination of Change Tracking with Text and Audio Comments. It's great for collaboration on documents that require review by different people. Did you know that existed?
- Read the Manual. Actually, don't read the manual supplied by the vendor. Use that as a last ditch effort to figure something out since vendor manuals read like a phone book. Go to a major bookstore and find a nice thick book on your application, skim through it, and pick out the most useful sections. Those books will often have more applicable real world examples than the vendor supplied manuals.
Improve Processes
Now that you've had the chance to figure out all these cool features that were hidden in your application, it's time to put them to use. This is where your expertise in your company's business processes comes in handy.
- Use New Application Knowledge. Take a moment to examine your internal and external business processes. Technology is the best medicine to attack pain within your company. However, as with all medicine, it has to be properly prescribed for the right ailment or it will be ineffective. Look to see if any technology tools and features you currently possess can reduce inefficiencies with processes.
- Cross-Train IT on Processes. The best overall application-users are usually your IT staff members. If they don't know something, they learn it by "sink or swim" after the first time a user calls them with a particular problem. Techies tend to take a lot of their knowledge for granted so they never pipe up with suggestions on how an application feature can make life easier for users. You know the process, but they know the application capabilities. Share that knowledge. A good thing to do is to let your techies in on process meetings and get their opinion on what technology you have that could be used to support or improve the process.
Train Users
Like most companies, you may have had that one successful training session for all users. However, since then you have lost and gained a few new faces and the way certain things were done back then might have changed by now. Companies can take advantage of this lull in the economy to beef up employee's skills.
- Reaffirm What They Should Know. Start training at the beginner level, even for those who have already been through this training a year ago. If users see something done the right way again, it will reinforce proper application usage. A very small percentage of users will find this boring. It has been my experience that even a well-versed user may find some sort of enlightenment over a technique that they may have forgotten.
- Teach New Tricks. If the overall user sophistication is really high, then change the motif of training to presenting "Tips and Tricks" and make the sessions interactive. This way, users can feed off of each other's experience.
Summary
The key point I'm trying to make is that you can improve your company using IT without having to spend money on a whole lot of new hardware or software. Just by refocusing the energy of IT, you will build a company that will come out of economic low-points stronger than when it went in. This general check list is enough to get you started but by no means encompasses the money saving and value enhancing options available to your company's specific situation. Indian River Consulting Group offers services such as an IT Improvement Audit that can be used to identify all areas of high-value, low-impact improvement with action plans for technical and non-technical staff. This audit is specifically designed to assist companies with little to no in-house, professionally trained IT support.
IRCG is an experienced based firm specializing in Distribution. Started in 1987 by J. Michael Marks, IRCG's specialists consult with distributors and suppliers to make the changes necessary to maintain competitive advantage. You can contact IRCG by calling 321-956-8617, or visit www.ircg.com for more information.
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