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In uncertain economic times, businesses are forced to redefine “business as usual” and come up with a new definition. This new definition must allow companies to not only to sustain business, but drive profitability with the face of uncertainty looming through the window. With a big bite coming directly out of Profit Margin, typically attributed to the lack of consumer spending, how is it possible for companies to survive?
Anyone with any business knowledge understands that the only way to preserve profitability when revenues are down is by reducing costs. However, proceed with caution here and do not jump to conclusions. Keep in mind, the economic downturn will not last forever. Therefore a company must be positioned to return to “business as usual” when the opportunity arises. With these key points in mind, there are many different approaches to reducing costs which will allow for preserving staff, maintaining a high level of product quality, as well as maintaining the high level of customer service that is currently being delivered.
One of the primary areas that hold a great deal of operating cost savings is in the area of IT. Here are 4 simple cost saving measures that may hold the key to a great deal of cost savings:
- Assess Maintenance and Support Contracts: Depending on the size and complexity of an organization and whether or not a company has an asset management practice, the on-going charges for software and hardware support and maintenance agreements can compound exponentially. Discovering software or hardware that is no longer being used, then conducting a deep dive into the current base of IT contracts and determining whether maintenance is being paid on these assets , is a great way to pulling the plug on unnecessary infrastructure costs. On-going cost control and monitoring is an effective way for an organization to implement an asset management program.
- Consider Re-Negotiation of License and Maintenance Contracts: Hardware and Software companies are faced with the same challenges as everyone else in the business world. They are looking for ways to sustain their businesses in a new economy. Although we look at the down-turn of the economy as a challenge when running and sustaining business, we also need to position this as an opportunity to leverage better contracts. Take the opportunity of a down economy to negotiate better rates and terms. Consider third party maintenance on equipment; Third party maintenance can be just as good as OEM, at a fraction of the cost.
- Reduce Printing Costs: The average cost per page for personal B&W laser printers average around $0.04 to $0.05. Eliminate personal printers by replacing stand-alone units with more efficient network-multi-function printers. By implementing a multi-function network printer/copier, an immediate savings of $0.02 per page can be yielded. Again, another expense that can grow exponentially.
- Eliminate Digital Storage Waste: According to Iron Mountain, on average, unstructured data claims 60% of total storage capacity. Even under the best circumstances, approximately 30% – 40% of data falls under this category. On average, a company’s storage requirements may grow anywhere from 30% – 50%. With requirements of Sarbanes-Oxley, the need to maintain inactive data has dramatically increased the storage requirements for all organizations. By outsourcing storage, companies can realize tremendous storage infrastructure cost savings and preserve a more efficient infrastructure.
Although this article only touches on a few different ideas in which financial relief can be recognized by an organization, it hopefully provides examples as to how hidden cost saving opportunities may exist where you least expect them. Take the opportunity to seek out your own hidden treasures and you will find your company positioned strongly for the next economic up-turn.
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