IT maintenance, upgrades and new implementations are necessary expenditures for any business that wants to stay relevant, compliant and competitive. Unfortunately, they can also be very costly and and rife with opportunities for overspending. In today's uncertain market, IT leaders and purchasers often struggle to find a balance between reducing IT costs and keeping the organization's IT systems current and effective. Suspending projects or cutting new investments may save money in the short-term, but it will inevitably hurt the business in the long run.
The best way to avoid a situation where business is impacted by budget cuts is to find ways to reduce costs during the actual purchasing process. Arming yourself for negotiations and having a clear plan will go a long way in allowing you to invest in the technology you need without overspending. Remember the following before your next purchase:
1. Your existing vendor may not be the best
Your current vendor may not always be best choice, especially if you are purchasing new trending technology. Do your research on alternate vendors to get the best deal and gain valuable leverage for negotiations.
2. Only buy services you will use
Always think twice about bundled deals--they may end up costing you more than they save. This is because bundles often contain services that you don't need or will never use. It probably makes more sense to skip the bundle and only purchase the items that will actually provide value to your business operations.
3. Know fair market pricing
The best thing you can do to save money on IT purchases is to know what fair market value is on the items you wish to buy. Without this knowledge, you will certainly pay too much.
4. Reduce support where it is not needed
New software and implementations need to be supported, but how much is too much? Before agreeing on any level of support, access which areas need premium support and which ones will function with less.
5. Don't stand for annual maintenance increases
Vendors will often try to increase maintenance fees every year and tell you it is standard practice. If you agree to these annual increases, you are overpaying for service.
6. Plan ahead
Always remember to make purchases that will put you on track for your 12-18 month goals, not ones solely based on what you need now. Keeping these future goals in mind will set you up for success as your business grows and changes.
The best way to avoid a situation where business is impacted by budget cuts is to find ways to reduce costs during the actual purchasing process. Arming yourself for negotiations and having a clear plan will go a long way in allowing you to invest in the technology you need without overspending. Remember the following before your next purchase:
1. Your existing vendor may not be the best
Your current vendor may not always be best choice, especially if you are purchasing new trending technology. Do your research on alternate vendors to get the best deal and gain valuable leverage for negotiations.
2. Only buy services you will use
Always think twice about bundled deals--they may end up costing you more than they save. This is because bundles often contain services that you don't need or will never use. It probably makes more sense to skip the bundle and only purchase the items that will actually provide value to your business operations.
3. Know fair market pricing
The best thing you can do to save money on IT purchases is to know what fair market value is on the items you wish to buy. Without this knowledge, you will certainly pay too much.
4. Reduce support where it is not needed
New software and implementations need to be supported, but how much is too much? Before agreeing on any level of support, access which areas need premium support and which ones will function with less.
5. Don't stand for annual maintenance increases
Vendors will often try to increase maintenance fees every year and tell you it is standard practice. If you agree to these annual increases, you are overpaying for service.
6. Plan ahead
Always remember to make purchases that will put you on track for your 12-18 month goals, not ones solely based on what you need now. Keeping these future goals in mind will set you up for success as your business grows and changes.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT expense reduction solution service
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