This is a list of questions related to saving money on operational costs by using your IT systems better. If you’ve got any ideas about saving money or containing costs, e-mail them to me at bill@billdotson.com or post them in the comments.

This list is also available as a PDF (Information Technology Cost Savings Questions) if you need to show anyone else in your firm where to start looking for money saving areas.  

1. How is IT managed? Is it a “we spend what we need to when we need to” or is it a part of the business operation? Spending haphazardly tends to cause greater expense than having a planned budget. Investigate managed services from an outside vendor – it’ll help you manage IT costs like a utility – you put the risk on them while you pay a flat, recurring fee for managing IT.

2. Many people rely on e-mail now. Is the e-mail system set-up to facilitate non-stop communication if needed? I often ask my clients how long they could be without e-mail and the answer is typically “one hour”. Once we know how important it is, then we can set-up systems to make sure it does not go down. Lost productivity has real business cost.

3. How old are the computers, servers, and other equipment? Once they reach their third year of use, it’s time to either replace or plan on replacing them. It’s cheaper to buy new ones than repair old ones.

4. How is the software licensed? Microsoft offers plans that give you a much better deal than buying direct from a manufacturer. Typically you can spread payments with zero interest or get a hefty discount. You should get help from a Microsoft specialist. The licensing requires a Ph.D.

5. Are there internal IT people answering “how to” and other helpdesk-type questions when their time should be used for much more valuable projects? Helpdesk can be outsourced to native US-English speakers at a fraction of what a full time employee costs.

6. How do you contract with your outside IT services vendors (if used)? There are contractual items to make sure are present such as “service level agreements” and discounts for service commitments. Keep an eye on these!

7. If the company writes its own software, how is it managed and what does it cost? Typically, places who write their own software are paying a bit more for it than they need to.

8. How many servers do you have? Now is a great time to consider making them virtual. Benefits: less hardware (save on the warranty and space), easier to back-up, and could cost less in electricity.

9. If you have multiple office across telephone districts (meaning you use long distance) then look into VOIP phone systems like Cisco and Avaya. If you have a small business, look into Skype.

10. Ask your IT suppliers how they are compensated and work with them to achieve “win-win” for both of you. Here’s an example, manufacturers regularly push one product line and create incentives for the vendor to sell these over other lines/competitors. Often, you can get some perks you might otherwise be paying for. Training, extra media, reimbursement for installation services, and so forth.

This list is not exhaustive. It’s just a start at looking at cost containment and/or savings using technology. I’ve left off all of the Web 2.0 systems used to save money (for another post, of course!).

We’re offering a seminar on document retention and risk management on the 4th and 5th. One seminar is in Lexington and the other in Louisville. When brainstorming about valuable content to share, I thought this would be a good idea because so many businesses need to be organized. Will Montague and I are going to show our guests how to keep legal fees low and what to do to manage risk using a combination of policies and IT.

The cost is….wait for it…Zero.

Yep. of course Will and I hope we can generate business from people attending, but there’s no obligation.

I got burned by legal discovery fees once, was told I would win the case, but that the case would cost me everything. Don’t let that happen to your business. I was flabbergasted (yep, that extreme) when it happened. Caught totally offguard. Later, I found out it was cheaper for them to sue than to pay the bill for my firm’s professional services. Almost 8 years later, I still cringe from the situation. 

If you know of anyone who would benefit from a two hour session plus a free breakfast, tell them to contact me or sign-up at the site.

Our Ingram-Micro rep, Sara, gave me the idea so I cannot claim it as my own. The contest will have multiple winners and we give a hearty thank you to Cisco, Microsoft, and ASIGuardian for the support.

Spread the word! The info is online here.

Other highlights:

• There’s a finite amount that should be invested — beyond which are diminishing returns.
• This is about infrastructure — not software (typically viewed as an investment)
• There are examples by industry.

Enjoy!

Unless it makes or saves money, we don’t do it.

I wish everyone would think like this and track projects and meetings like this.

In the December 2006 edition of CIO, an article from CIO and the MIT CISR covered the stages of enterprise architecture. Essentially, organizations go through stages of IT maturity.

Don’t miss this table.

When reading the article, please keep in mind most companies stop at Stage 2 (Standardized Technology) and one can be in multiple stages at once if there are multiple divisions of an organization.

Moving from Stage 2 to Stage 3 (Standardized Processes) is very tough. This is why most firms do not ever move out of Stage 2. Its easy to look at the budget and think, “What can we cut or what can stay the same as last year?” It requires minimal thinking and nothing extravagant.

When one desires to standardize processes (Stage 3), multiple areas of an organization are called into play. People must change the way they work, coordinate terms and understand what they do every day. All of the knowledge contained in brains has to be committed to paper (or electrons) so process planning can occur.

Process planning is the work that causes stress. People from different departments write down how they think the total process works and are shocked to find out the process is wrong or inefficient. Positions may be eliminated and created, too. Wouldn’t it be easier to keep on keepin’ on?

The 2007 NWC Reader Survey is a great tool for IT Services and VARs to learn from. Often I wonder if I will have the opportunity to read an article from buyers directed at sales people. Now I have.

The article details the things IT buyers wish sales reps would stop doing and at the top of the list is promising features or functions that do not exist. In other words, the top No-No says “don’t lie”.

Guess the number one wish IT buyer have in a sales person: knowledge of what they are selling. Funny how that works out, huh?

Rounding out the rest of the top five No-No’s: misrepresenting integration issues, ignoring you after you get paid, low-balling deployment costs, and shipping beta products.

Let’s step back for a second and think about a sales team — invoke Pareto’s principle (the 80/20 rule). A Sales Manager’s top 20 people bring in 80% of the revenue. The top 20 probably have better relationships with their buyers and do not commit these “selling sins” as often as the other 80% of the sales team. That 80% is made up of people who are still learning the basics, don’t care, and are looking for the quick commission check.

The smart Sales Manager can use the Survey to help train. In fact, I recommend that a sales person take the survey to sales meetings. Bring the often unspoken concerns of your buyer front and center. Talk about them. If you plan on committing the sins, tell your buyer so he/she knows in advance. (I don’t advocate committing them, by the way.)

Let’s turn back to the survey and look at the top 5 buyer wishes. They would like to be able to get someone on the phone who knows what they are talking about, address business problems (not use buzzwords), be up front about problems, take responsibility for problems, and deliver capabilities that are listed on the data sheet.

Sales can achieve all of the wishes through relationships or self-action. If I change the desires around, I make them into this:

The ideal sales person communicates openly with his/her buyer, knows the ins and outs of the product or service, makes personalized marketing material and proposals, and puts helping the buyer’s business in front of a commission.

Presumably, the buyer is going to reward such an honest, hard-working sales person with long term business at a better than average margin!

If you are the buyer, my next post has a request from the ideal sales person to you…

Mauro Cardarelli points out an article in CIO Insight about Robert Scoble‘s views on corporate blogging. Scoble happens to be a former Microsoft employee and one of the most prolific bloggers in the world.

Scoble’s comments about blogging are important since he points out a few great ideas for internal blogs. The first is an example how all sales people could publish their own blog — keeping their manager(s) informed of activities and leaving the e-mail Inbox free for client communication.

I think this is a wonderful idea. All employees could have an internal “What I did today” blog, but limiting it to daily activities would not make sense. Many Japanese firms have a kaizen policy — employees are encouraged to submit ideas to make their processes better. These firms could seek out blog posts with the tag (keyword) “kaizen” for employees’ ideas.

Depending on applications in use at your company, you may want to do this. Blogging software is free.

Scoble’s second idea links the knowledge (data) stored in employee message stores (those gigabyte-plus e-mail files on your computer) to blogs. I have experience with this situation since one of my former employers contacts me monthly asking, “Where are the notes on…?” I let them know where the files are, but wouldn’t it be easier for someone to go to a web site and type “Bill Dotson Acme Notes” and see all the results?

You can link to blog posts from internal documents (e-mails and MS Office files, for example). Posts can contain images, video, etc.

Remeber when I said the blogging software is free? Losing corporate knowledge is not. Are blogs worth investigation now?

An article in CRMMastery illustrates one of the main reasons salespeople do not use CRM systems — they are not built like a sales person sells. At the end of the article is a bullet list of needed functions for sales people:

Eliminate Data Entry,

Increase High-Touch Selling,

Provide Step-by-Step Guidance During the Selling Process,

Maximize Productivity and Profit, and

Maximize Productivity and Profit

The two most difficult and important are eliminating data entry and step by step guidance. I’m not sure how one would eliminate data entry solely through software. One could only offload this to another person — an assistant, for example.

If the CRM system, or any very important software could offer guidance during each step, it would be great. Quicken, MSMoney, and QuickBooks do this for their users. Why don’t other firms?

The simple reason is that is expensive and hard to do in applications like a CRM system. The mid-market is a tough place to operate. Software buyers are big enough to want/need customization, but too small to afford the six-figure consulting to build customized and business situation- dependent help files.

If the guidance existed…

Think of the time saver it would be to help new sales reps (or any other employee) entering new opportunity data in a CRM system;

The avoided frustration from not remembering the new pricing rules;

You’d have to understand your business in order to make the guidance files (this mapping could be worth a separate project!)

Proposals could go out faster since they would likely be correct.

The guidance can exist, but one needs scale to make the most of it. If you have less than one hundred people using a software system, the investment is probably not worth it. If you have more than one hundred users, you should seriously consider it.

Wait, didn’t I just say the mid-market could not afford to build a system like this?

I did.

If one were to outsource this, it would be expensive. A mid-market firm can now buy software allowing it to create Flash video files that an existing employee can build and annotate. The cost of the software is under $1000 and the only other cost is employee time.

What are you waiting for?