Its fall cleaning time! If you want to improve your organization’s financial performance, consider getting rid of obsolete recurring service costs. This is particularly true with IT services, where the list price often decreases over time as the exotic becomes mundane, while your cost remains at the original negotiated level year after year.
The topic comes to mind as we have been engaged in the exercise of helping a client extricate themselves from a full services IT supplier. The challenges of actually getting free of the supplier is a topic on its own, but it has also been an eye-opener to see the decade-old recurring service charges compared to those of current prices for current offerings.
Consider website hosting costs. Ten years ago, having access to a dedicated web server for $200/mo may have been a good deal, but with constantly improving computer specifications, a better performing virtual private server is available for an order of magnitude less, that we switched one client to. We have another client who is currently paying over $100/mo for an old remote file server, which can be replaced with modern cloud storage for a fraction of the cost.
Other services – internet connectivity, leased printers etc. – may be providing upgraded performance for the recurring price, but for services no longer required, discontinuing them will give an immediate bump to your IT department’s financial performance.
Spurred by the discovery of the out of date recurring IT costs for the above-mentioned client, I took a look at costs in our own small shop.. The result?
- Cancelled unneeded landline
- Renegotiated mockup presentation services contract
- Renegotiated web security services contract
- Initiated CRM review with an eye to changing providers for 2019
The resulting savings were well worth the effort taken to do the “fall cleaning”.