Cost-Cutters

Computerworld - Employees buy their own cell phones and rate plans to suit themselves. No one ever has time to check those stacks of telecommunications bills that arrive monthly. Bandwidth grows uncontrollably, and contracts signed several years ago just sit in a file cabinet.
If this sounds like your IT shop, there's room for some cost-cutting improvement. The first step: Get "visibility" into your wide-area network, contracts and invoices, because you can't manage what you can't see.
For example, Hold Brothers On-Line Investment Services Inc. installed WAN monitoring tools from Westford, Mass.-based NetScout Systems Inc. to "give us visibility into what was flowing over our network," says Chris Lukas, chief technology officer for emerging technologies at Jersey City, N.J.-based Hold Brothers.
The monitoring allowed the online stock brokerage to identify and clean up network inefficiencies, which saved so much bandwidth that it didn't need to install additional T1 lines. Hold Brothers was able to save $1.1 million per year.
Computerworld asked networking managers, analysts and consultants to suggest other ways to trim the fat.
Money-Saving Tips
• Go online to purchase used networking equipment for as much as 75% off list price from Web sites such as those of eBay Inc. and uBid Inc. (Maybe it was hardly used by a failed dot-com!)
• Renegotiate for new discounts on hardware every time you sit down with a vendor, even if you got a discount last year. Companies that fail to make their incumbent vendors compete for business often miss out on discounts of 50% or more. And make the used-equipment prices a benchmark for negotiations.
• Exploit the fierce competition in the reseller channel. Instead of buying directly from the vendor, you can get a better deal on the vendor's gear from a value-added reseller or a systems integrator.
• Consider outsourcing certain WAN services, such as global remote-access capability, e-mail management or Web hosting of static pages. This can reduce the need to add IT staff. But large-scale outsourcing doesn't work for fast cost-cutting because big deals require a lot of due diligence and upfront administrative costs - and the savings won't show up for 12 months.
• Hand out discount long-distance calling cards to your heavy travelers. Sam's Club, for example, has prepaid cards at the incredibly cheap rate of 3.47 cents per minute.
• Eliminate "maverick buying" of cell phones and rate plans. Negotiate a master contract, which typically saves $20 to $30 per month per employee. A company with 1,000 mobile workers can save $250,000 to $350,000 per