Four Ways to Slash Tech Costs

The days of shelling out hundreds, and even thousands, of dollars for the latest and greatest technology gadgets and software are long gone. Economic conditions are such that companies of all sizes are cutting back on all aspects of their businesses, technology included. And while few business gurus would argue the merits of tightening those belts right now, the key is to reduce tech spending without sacrificing performance, productivity, and profitability. Here’s how:

Reduce the Complexity

Look at your IT budget. Chances are that roughly 60% of it is allocated to service, as opposed to hardware or software purchases. “It’s not the product that’s expensive,” explains Matt Friedman, vice president of marketing for IBM in Armonk, N.Y. “It’s the cost associated with installing and integrating all of the complicated equipment.”

With that in mind, Friedman says firms looking to lower or control their IT spending should focus on reducing those complexities. That means seeking out simpler solutions such as those offered via subscription on the Web in an Application Service Provider (ASP) environment, and that don’t require complex installations and full software purchases.

“Look for solutions that deliver the capabilities that you want in a pre-packaged format that’s ready to use, and that doesn’t require any IT skills to set up, install and run,” Friedman says.

Consider Refurbished Equipment

Every technology manufacturer has a division dedicated to refurbishing and selling equipment. There’s no time like the present to take advantage of this low-cost way to buy technology, says Ronnie Parisella, chief technology officer at Primary Support Solutions, a New York-based computer network design and support firm. The equipment can be purchased at a significant discount (compared with new) and typically comes with a full warranty and support.

ampforwp-incontent-custom-banner ampforwp-incontent-ad2">

“Why buy a workstation at full price when you can get the exact one, refurbished, for 20% or more off of the list price?” Parisella says. “Many times the equipment hasn’t even been used — or has just been briefly tested — making it a great bargain for companies looking to cut back on their tech spending.”

Upgrade Existing Machines

If new computer workstations aren’t in your budget right now, you can speed up those existing computers by simply upgrading the machines’ random access memory (RAM). “Many people don’t realize that they can extend the lives of their older computers by 6-12 months with a simple RAM upgrade,” Parisella says.

Expect to pay just under $100 for a 1G (one gigabyte) upgrade, says Parisella. In return, your computers will run faster and remain a viable part of your business operations, despite the fact that they may not be the newest models available. “This is a great, cost-effective way to maximize your technology investment,” Parisella says.

Keep Maintenance Records

Much like a company would maintain service records for the automobiles that it leases or owns, all firms should be keeping the purchase, service and repair documentation associated with their technology purchases.

Not knowing when a particular machine’s warranty expires, for example, can mean the difference between a free service call (when the problem is caught in time for the warranty to cover it) or a hefty

repair bill (if the problem is ignored). “Improper documentation can be a real thorn in the side of a struggling business,” says Parisella, “that spends money unnecessarily because it doesn’t know what equipment it owns and how those investments are being maintained.”

As companies continue to find ways to lower their costs of doing business, Friedman says those looking at their IT budgets must do so in a way that doesn’t find firms “cutting off their noses to spite their faces.” Consider, for example, whether the decreases will truly help reduce cost structure, or whether they will hamper performance and profitability. “Look carefully at your business,” says Friedman, “and figure out ways to reduce IT expenses that don’t hurt your company in the long run.”