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I.T. Cost Saving PitfallsCost Saving Mistake #1 - Switching ISP's on your own.Posted 11/03/07 That’s right I used the words “cost saving” and
“money pit” in the same sentence. That’s because there are at
least 5 things that I see clients do all the time with their
office Information Technology (IT) that seams to be a
frugal move but in the end it’s just a waste of their money.# 1 Switching your office Internet Service Provider (ISP) to save $20 a month. So that sounds like such an easy call to make right? After all that’s a savings of $240 a year. But let me run this real life story past you before you go jumping to conclusions. You see unfortunately in this real life story the decision to switch ISP’s was made by the Office Manager without consulting with the firms IT company. In this case the Office Manager used a Nationwide Computer Service Company who specialized in small to medium size office computer support. And although the Office Manager is well respected by the firms owners, and has always been one to keep a tight hold on the company purse, this move is about to bust the bank. Proceeding happily along the path of saving the firm $240 a year the Office Manager cancels the current contract with ISP number one and signs all the necessary paperwork to move over to ISP number two. Being a well organized Office Manager all the arrangements are made to have the new ISP contact the IT company who takes care of the firms network so they can coordinate their activities and ensure the move goes smoothly. A few days before the move the ISP makes contact with IT company and tells them the plan. During this initial contact the IT company asks the ISP about their plans to replace several expensive and critical Cisco boxes that were supplied at no charge by the previous ISP. The new ISP replies they have no plans for any such replacement as by the terms of their contract those boxes are to be supplied by the customer. A sales rep from the IT company then immediately contacts the Office Manager and informs them that they are about to lose $5,000 in necessary hardware that was being supplied at no charge by the former ISP. Knowing at this point the contracts have been signed and the deal has gone past the point of no return the Office Manger requests a quote to buy their own Cisco hardware. Next the IT company explains to the Office Manger the concept of a static IP and how it is being used in the firm’s current network setup. Relieved that this issues does not require any additional hardware purchases, the Office Manger authorizes what ever time necessary to move the firm’s Microsoft Small Business Servers and other systems over to the new static IP addresses provided by the new ISP. To wrap up this mess the day of the switch over comes and goes and no major problems have occurred. The IT company doing the network support and the new ISP work together very well and the new Cisco hardware purchased by the customer works flawlessly as expected. But now, safe from the prying eyes of the Office Mangers supervisors, it’s time to analyze the true cost savings of this move. For the sake of a realistic time frame lets use a 3 year contract to crunch the numbers against: ISP cost savings over the term of the 3 year contract ($240 per year x 3 years) = $ 720 Cost of the New Cisco Router and VPN Hardware no longer provided by the ISP = $5,000 Cost of 8 man hours of labor to install the new Cisco hardware and switch IP addresses on several dozen devices = $752 Total savings (-$5,032). That works out to an additional $139 per month for the next three years in order to save $20 a month on the ISP. Hard to imagine this common IT cost saving move would ever have been authorized by the Office Manger had the true costs been known and evaluated up front. But just in case you have been the Office Manger in a similar situation, don’t feel too bad because it happens all the time. But if you have ever been in that spot next time be sure to contact your IT company or staff in advance and discuss the feasibility of the project before you commit to something that looks like an easy call. Consulting with a good IT company will help you understand the pros and cons of your plans so you can move forward only on those that will truly make a worthwhile cost savings for your firm.. To comment on this story, see our Computer Service Blog. Or see our other stories in this
series at:
Andy
Wendtt |
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