Breaking News: IT Can Actually Save Money

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Headline: IT Saves Money for Company!

Wouldn’t it be great to see more headlines about the positives of IT rather than all the negative press about cyberattacks, privacy concerns and cost overruns?

If you are a small to mid-sized company, you are probably using one or multiple vendors for IT services and support (i.e. phone system, cable/network, internet, IT guy, etc.).  You may even have an internal “IT guy” or IT staff that works with one or more vendors to deliver IT services.

At Fluid, we state we will, not only, provide excellent support services (which should be expected), but we also provide valuable strategic IT services to help reduce IT costs, improve productivity, and implement technology that will support overall business objectives.  Unfortunately, companies have received poor support services for so long that they don’t believe there is any way money can be saved and productivity can be improved by working with an IT services partner.  Most businesses are used to the reactive support model, which often does not resolve the root cause of issues.  When a need arises, IT personnel fixes the problem as quickly as possible so that users can do their jobs.  But, the root of the problem is often ignored, and the same issue will usually occur again.

Go beyond the basic blocking and tackling

Providing quality support/helpdesk services is at the basic level, and any IT services provider should be excellent at it.  But, beyond basic support, we see the real value in approaching technology strategically and proactively, and ensuring that the right people are focused on the right things.  Also, properly managing all third-party vendors, on behalf of a company, requires a balance of the right staff, the right skillset, and most importantly, an in depth understanding of the business.  We’ve built our MSP business model based on the premise to deliver on those promises.

Focus on the whole, not the parts

When working with technology vendors and partners, each one typically only focuses on their piece of the puzzle, never expanding beyond to see how it fits into the rest of the business.  Our approach is opposite, which results in tangible benefits.  We take over the management of all third-party vendors to ensure that everyone is working towards singular goals that align with the overall business objectives.  Also, most companies don’t want to deal with other vendors, but their IT personnel doesn’t do it for them either.  I can’t count how many times I’ve heard C-level executives say “I don’t want to waste my time calling ABC vendor. I can’t understand all the technical jargon, and I don’t want to.”

Case Study: Saving money and adding value through strategic management

To understand the possibilities, here is a real business case:

One of our clients recently acquired another company.  As part of the acquisition, there were all the normal integration components, which required areas for optimization. But, there were also other critical projects.  The company needed new cabling/wiring for all locations, as well as a new VOIP internet-based phone system, and upgraded internet service.  At each location, cabling, voice and internet service, was provided by a different vendor.

Most companies, in this situation, would allocate a staff member to manage all the vendors. The staff member may have some technical acumen, but not enough to truly know what to look for in order to manage each vendor effectively.

In our client’s case, as in most similar situations, all the vendors were dependent on the other for implementing their services.  The internet service had to be increased to meet the new phone system requirements, and the cabling had to be in place to provide the necessary “ports” or wall jacks for the phone system.  The number of total ports, in each location, drove the need for new networking equipment. 

As they should, our client wanted and expected that all the pieces would be done correctly so that they could walk in the office, and everything would be configured and working correctly.  The challenge is, every piece must be not only done correctly, but also timed in a way to minimize unnecessary ‘dead time’.

As their technology partner, we stepped in to manage all the vendors, and what we found was frightening.  The cable vendor had provided a quote for both locations based on a walkthrough with one of their staff.  They presented a quote that was over $20,000 for the job.  Once we evaluated it more closely, we found an abundance of new cables that were unnecessary.  This was not the fault of the cabling vendor, they were doing what they thought was right, based on what the staff member told them.  The staff member didn’t have the knowledge to understand the technical details, and how things would work with the new phone system.   

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We saved our client over $25,000 on one project

We evaluated the cabling proposal and conducted calls with all other vendors, to ensure that everyone understood their piece and dependency on one another.  After our evaluation and walkthrough at each location, the cabling cost dropped from $20,000 to $6,000.  A substantial savings of $14,000 in one-time CAPEX cost.

We took the same approach with the phone vendor and the internet service provider.  Internet service providers (ISP) are always happy to sell you more bandwidth.  Again, like the cabling, the ISP worked with a staff member to determine the bandwidth required.  As before, the staff member lacked the necessary understanding to calculate what would be required.  Working with the phone vendor, we calculated what the maximum bandwidth usage could be. Then, we compared it with the actual usage reports, which allowed us to calculate a more accurate estimate of internet bandwidth needs.

Through our evaluation, we found that the company could start at a lower bandwidth level and confirmed that the bandwidth could be increased very quickly if necessary.  So, rather than buying more bandwidth than needed ‘just in case’, they were able to get what they needed with the ability to increase.  We ended up saving them over $500 a month in OPEX costs – which adds up to $6,000 per year.

We took the same approach with the phone vendor and found the number of handsets was too high, which resulted in additional savings in both one-time CAPEX and monthly OPEX.

Lastly, the additional cable drops and phone system required the purchase of new networking equipment to connect everything properly.  If the initial figures were used from the cabling and voice vendors, the company would have purchased more expensive networking equipment than necessary.  This also resulted in additional savings of over $5,000 in one-time costs.

The total savings were significant – over $25,000 in one-time costs and $1,500 in monthly costs

By working with and managing all vendors, we were able to help our client save a substantial amount, while also ensuring that each vendor would implement the right solution and do it correctly.  For a small to mid-sized business, spending money on technology can cause a major strain on finances.  Without our involvement and management, the company would have spent money it didn’t really have on solutions that would have been excessive and completely unnecessary.

Your Managed Services Provider can and should save you money and improve productivity

I’m sure other MSP’s say they offer strategic services and can save you money, but we’ve found that the reality is very different.  Unfortunately, most MSP’s don’t have the staff or skills required to manage all third-party vendors effectively.  Anyone can say they can do it, but can they prove it with actual numbers.