More bang for less bucks

With the global recession forcing many businesses to slash costs I started thinking about the Microsoft slogan for the 2003 product launch. Yes way back in 2003 Microsoft were telling us about “doing more with less”. The reality for many IT projects was almost the opposite for many reasons that I won’t dwell on here.

As I see it we can increase Return on Investment (ROI) in two ways. Reduce costs or increase returns.

Lowering costs:

Salaries of highly skilled IT staff are a major overhead over the long term. Lowering costs by using contractors rather than employing internally helps in two ways. Internal staff are not able to focus on a specific project like a contractor can. As projects take longer to complete the return on investment is delayed and eroded. Once the project is complete do you really want to keep paying the salary? Contractors are often cheaper in the long run.

Telco’s are often a big cost with long contract lengths. Make sure telecommunication costs are reviewed before they rollover. New generation fibre networks can be a very competitive alternative to traditional WAN links.

Consider new technologies that can lower costs. Make sure you take a long term view on the technology. Investigate the licensing costs and how this can be used to your advantage. Make sure your capacity planning is done accurately to avoid unexpected future costs.

Increasing returns:

Talk to the end users of the system and ask questions to find out how the systems could be improved to streamline processes, improve decisions, reduce service delivery time and communicate with customers. Many systems will have capabilities that are not being used or aren’t used in the best way. Often this is simply because the designer of the system hasn’t anticipated how it will be used or times have changed since it was implemented.

Extending the life-time of a solution increases the return. Calculate the amount of time you expect to recover the initial investment (including running costs) and then look how much longer the solution will be useful for. Making good technology choices at the beginning will allow lower cost updates and improvements to the solution and this will almost always be cheaper than a redevelopment. At the same time you must ensure you are not being left behind. What happens if you competitors make a technological jump?

Concentrate on the right things:

Make sure you are concentrating on the right things. For example, the term “green computing” is currently buzzing out of marketing departments, but how long will it take to save the power the manufacture claims and are you able to get bigger savings quicker in other areas? The answer of course depends on many things but my point is not to follow these things blindly, crunch the numbers before taking the plunge.

Finally talk to experts and research the options before making a decision. Long term costs and benefits will vary for many different reasons. Quality decisions will result in better returns.