While large companies generally manage their IT budgets professionally, small and medium-sized companies sometimes have no transparency about their IT expenses, they act “on demand”. The overview of the total IT costs is correspondingly poor, which usually includes much more than expenses for hardware, software and personnel.
Such a condition is not optimal for management or IT managers. It makes planning and efficient use of funds difficult. In such cases, IT costs are a necessary evil, a cost center – and not infrequently a black hole.
Some IT managers themselves also contribute to this: Who likes to make themselves measurable? However, it can backfire if IT has to renegotiate every little expense and is paralyzed by an unpredictable amount of support. This leads to inconsistent systems and sluggish processes – and thus to dissatisfied users. Users should ask themselves the following questions as part of an inventory process:
What hardware and software is available and what did it cost?
How long does the typical usage cycle last? Three years, five years or more?
How old is the existing fleet of servers, PCs and notebooks today?
How often do the installed software release changes. If this is based on subscription models: What are the annual costs?
Are the everyday procedures clearly defined and documented?
If it is known what the expenditure in the recent past and present looks like, it can be used to make sound assumptions for the future. An exact inventory often reveals that there is more than one solution for certain tasks, so that additional license costs and perhaps more work arise.
For example, the Microsoft 365 suite (formerly Office 365) contains the collaboration and video conferencing solution Teams, which is used in more and more companies during the corona pandemic. Three years ago, this did not meet the desired requirements for many, which is why companies often chose a different solution. Today you should take a closer look to see whether the collaboration and video conferencing solutions that were purchased at the time are really still needed.
- Google Meet
Google Meet enables web-based video and conference calls. In the free version available from May, the service allows conferences with up to 100 participants with a maximum duration of 60 minutes – but this restriction will only come into effect from October 2020. Like most Google services, Meet is designed for Google Chrome and other Chromium-based browsers and works here without plugins. Mobile applications for Android and iOS are also available.
- Facebook Messenger Rooms
With Messenger Rooms, users can set up a conference room directly from Messenger or Facebook and invite up to 20 – later 50 – participants to a video call – even if they do not have a Facebook account. There is no time limit. Participation is possible via smartphone or PC via the browser and, according to Facebook, does not require any downloads. However, users of the Messenger app have access to various AR effects (e.g. rabbit ears) and new AI-supported functions such as immersive 360-degree backgrounds and atmospheric lighting.
As the most well-known VoIP service, Sype also offers a range of video chat and video conference functions. Microsoft has replaced Skype for Business with the Teams platform.
The successor to Lync and Skype for Business is not a standalone product, but part of the Microsoft Office 365 Suite. However, Teams is available free of charge and is suitable for small businesses with up to 300 members. Guest access as well as individual and group video calls, screen sharing are also on board.
- Google Duo
Google Duo is designed as a free video telephony tool primarily for home users. The maximum number of participants in the Android and iOS app has only recently been increased from eight to twelve people and, according to Google, is expected to increase further. Duo is available as a web application for PC, Mac and Chromebook as well as a mobile app for Android and iOS devices.
- Jitsi Meet
Jitsi Meet is an easy-to-use solution for video conferencing that still offers many functions. The free solution is based on the open WebRTC standard and can be used on the PC directly and without registration in the browser (Chrome). Apps (Android, iOS) are available for smartphones and tablets.
The Norwegian service Whereby (formerly appear.in) is free of charge for video conferences with up to four participants. . The solution is WebRTC-based, which means that guests can easily connect via the browser without registration. Apps for Android and iOS are optionally available.
After registration, the free Tinychat offers the opportunity to quickly and easily open a new video conference. All you have to do is create a new “room” and send the generated URL to the conference participants.
Lifesize offers free licenses to companies affected by the coronavirus epidemic for a period of six months. Meetings and call duration are unlimited – the Lifesize solution is available for desktops as well as for mobile devices.
Zoom positions itself as one of the leading providers of video conferencing. The tool is primarily characterized by its ease of use and an attractive freemium offer: video conferences with up to 100 participants are already possible with the free version.
LogMeIn completely revised its video conference software GoToMeeting at the end of 2019 and implemented new functions. Among other things, the solution now works in the browser via WebRTC as well as via desktop and mobile apps. The subscription plans start at 10.75 euros per month and host for the professional version.
Cisco will continue to offer WebEx free of charge as part of the corona virus pandemic. Unlimited meetings with up to 100 participants, HD video, audio dial-in, personal conference room, screen sharing on desktop and mobile devices, as well as 1GB cloud storage and recordings are included.
There are dozens of such examples. For example, “AirWatch” (today “Workspace ONE” from VMware) – originally only used as a mobile device management tool – from the advanced version an integrated VPN solution that includes all endpoints from Windows to MacOS and iOS to Android and ChromeOS covers. In this way, Workspace ONE may make the VPN solution of the respective gateway manufacturer that is to be licensed superfluous. In addition, it can take over the complete software and update distribution for the aforementioned systems and even offers a migration path from the Microsoft System Center Configuration Manager. Relevant solutions from providers such as Baramundi or Matrix42 could be replaced as well as remote maintenance software à la TeamViewer and Co. Workflows and operation would change, the available personnel would have to get used to it.
A regular and accurate look at existing software solutions is actually always worthwhile. For example, with Microsoft Intune, mobile device management is already included and licensed in Microsoft 365 (depending on the plan). The use of another solution could often be saved – of course, always dependent on the individual requirements of the company. Other software may have been procured elsewhere earlier, but has not been put into productive use. They still pay for it.
Just as with the inventory, those responsible should think about the staff in the IT organization and their role in the company. Should it independently drive forward strategically central issues and look qualified at external service providers? Or do you want an IT that only opens and manages tickets with external service providers? Admittedly, a polarizing representation, but there are many different forms between these two extremes.
Routine activities such as the provision of client devices or end user support may be outsourced in order to provide the company IT with the time resources for more important topics. However, new tools could just as well be introduced to achieve the highest possible level of automation – in any case, employees are required to implement these things. If their capacity utilization is too high, there is an immediate need for action: If secure IT operation cannot be guaranteed in the long term, this can have serious legal and economic consequences. Missing staff also means that there is no scope for new projects and digital further development.
This will sooner rather than later lead to loyal employees throwing in the towel at some point. As a result, there is an expensive staff turnover, because new employees with different previous knowledge and approaches have to be laboriously trained each time. Continuity is lost, other departments lose confidence in their IT.
Standardization is still the method of choice to keep excessive support efforts in check. This naturally applies to end devices – from notebooks to PCs to smartphones and tablets. Anyone who runs after every bargain or makes individual orders as needed or even end-user requests quickly has a whole zoo of devices and software in use that can keep IT departments busy and paralyzed.
The tenth version of Windows 10 will appear shortly, regardless of the different editions and predecessors. However, those responsible for support should also be well versed in everything else, such as operating systems from Android 5 to 10, all the individual subtleties of the respective device manufacturers and, of course, iOS, iPadOS and MacOS. This creates frustration on all sides and causes considerable hidden costs.
Companies are well advised to put together a shopping cart with a maximum of a handful of hardware models, ideally from the manufacturer they trust. Certainly, individual devices can be replaced from time to time, but IT only has to use one service process in daily operation, instead of dozens of different ones. The problems that still arise will at least be uniform. Such standardization is also a basic requirement for outsourcing. A service provider who wants to offer reliable and cost-effective services will require standards.
The bundling of purchases can make a significant contribution to standardization, because central IT components such as CPUs, chipsets, operating systems or smartphones are subject to an annual renewal cycle, from which it must be uncoupled. Servers, PCs and notebooks in companies do not have to be replaced more often than every five years – unless the buyers have priced the bottom shelf.
It makes sense to concentrate the procurement in order to claim discounts from manufacturers. The margins in the hardware business are low, but it makes a significant price difference whether you procure devices individually as required from different suppliers or in batches of 50 from just one manufacturer, for example. If server and storage purchases are pending at the same time, five-figure savings can be achieved in the total volume. Project prices can often be claimed through the respective sales partners from a five-digit turnover, the saving effect is of course clearer here.
If you split the hardware purchase into a few large orders, you have full cost transparency and savings effects in addition to a strong degree of standardization. In addition, it is clear what sum will have to be budgeted again in about five years. Customers who concentrate their purchasing volume are also perceived more clearly by the manufacturer and the negotiating position is considerably strengthened. In addition to a preferred service, discounts for training courses are not uncommon.
Is there an ideal time for procurement? No. Anyone who is waiting for something new in IT when shopping will wait forever. And the days when it “gets cheaper after CeBIT” are long gone. Comforting: Before something disappears from the market, it usually gets cheaper.
Since bundled IT procurement involves massive investments, purchasing and finance departments or the management naturally involve themselves here. However, their expertise often does not go beyond comparing the sum of different offers. So IT management has to check carefully whether the offers available are really comparable. A single omitted position can make a huge difference. The situation is made more difficult by the fact that some providers try everything to make their products as uncomparable as possible, even for savvy eyes.
It is important that IT sets clear guidelines that enable comparability. Only then can the other areas be involved. A cross-departmental consensus should be established in advance on these rules of the game. The best thing is that IT provides at least two well-designed, differently expensive variants to choose from, which it can argue. You should also design the smaller version so that everyone can live well with it. Here, IT has to make clear arguments and, for example, point out that the life cycle can be shorter, or that there may be costs for memory expansions – which is why the more expensive solution may be the better and ultimately cheaper.
If IT calculates a budget, then it should also be responsible – commercially and technically. Once the budget has been approved, it makes sense for IT to have control over these financial parameters and to decide what is actually purchased. The purchasing department can of course negotiate the conditions, but not the scope of services. To do this, it must consult with IT. In general, constant back and forth with non-specialist departments should be avoided.
There is currently a trend towards cloud services, which are billed monthly or annually, possibly even by credit card. Interestingly, hire purchase or leasing of servers, PCs and notebooks, for example over a period of use of 60 months, are often undesirable.
Buying in larger volumes saves hard cash – due to discounts and the associated standardization. In the event of a crisis, reducing running costs quickly in order to maintain liquidity is a comprehensible procedure. But one has to ask whether one-time investments of five to seven-digit sums in hardware and software are cheaper in any case. Before you reject the idea, you should talk to your finance department or tax advisor about it.
A look at the state funding offers can be worthwhile, since there are numerous, regionally different programs of the federal states and municipalities to support small businesses. This also applies to digitization: the state of Hesse, for example, offers a “Digi subsidy”. This covers 50 percent of the costs for projects for the digitization of production and work processes and for improving IT security in small and medium-sized enterprises (SMEs) in Hesse. The grant is capped at a maximum of 10,000 euros.
To the funding programs of the federal states
Financial support can also be applied for in the area of employee qualification. The “Qualification Opportunities Act”, which came into force on January 1, 2019, is intended to support employees with further training who are at risk of being replaced by technology or who are looking for a job in a “bottleneck profession”, i.e. a job in areas where there is a shortage of skilled workers . Both further training / retraining and continued payment of wages during further training are subsidized.
Possible further training with an IT connection (exemplary):
SAP (basic course / personnel / sales / finance / purchasing / controlling)
Microsoft Office 365
Databases (Oracle, Microsoft, MySQL)
Software development (C ++, C #, Java, full-stack web and app development)
MCSA / MCSE
Technical and business English
Data protection specialist
Digital Transformation Manager
You can find more information at the following locations:
In conclusion, it should be noted that IT costs are predictable, optimizable and predictable – even if many smaller companies in particular are still often surprised by them. Coordinated with the corporate strategy and in cooperation with all departments, IT can plan which systems should be exchanged, whether the need changes, for example through acquisitions, and what growth can be expected. This data must be included in the budget planning. Conversely, IT can proactively support the corporate strategy and adjust the budget proactively instead of just reacting. (hv / fm)