28. Reduce maintenance costs
Cut your maintenance costs
While it’s quick and easy to simply accept the renewal proposal your maintenance supplier sends you each year, it’s also a sure-fire route to rapid cash burning. It’s a healthy policy to explore maintenance cost savings on a regular basis: networks and the cost of supporting them change constantly and opportunities for savings can easily be overlooked by the unwary.
Contract renewal
Achieving a reduction in maintenance costs may be fairly easy to negotiate when contract renewal time comes around. After all, your supplier already has the necessary spares so they have no sparing-up costs to meet. Also, with 12 months or more of history to review they can see that most parts of your network simply carried on working faultlessly all year. They are aware that you know they can see that, and that you’re wondering about dropping support on some items as a result.
Of course, there are real costs associated with providing maintenance support, and your support supplier has to make a profit. You are never going to reduce the cost of mission-critical network support to zero. But what else can you do to get the cost down?
Shopping around
The obvious answer to that is to shop around for better prices from other maintenance companies. This is most likely to be fruitful if you are currently using your manufacturer’s premium support service. If you are already with a third party maintenance supplier, you are unlikely to make significant savings this way. In fact, you may find that alternative providers actually quote more than your existing supplier, because they need to spare up, and because your existing supplier will want your repeat business enough to be willing to discount their prices to retain it.
There is another avenue to explore, though, which can realise significant savings whether or not you switch suppliers. It may not be surprising to regular readers of this series that it can be illustrated with a parallel from the world of motoring.
Checking the detail
When renewing your car insurance, you probably shop around to see if you’re getting the best deal. If the quotes come in at or around the same price, you might dig a little deeper into the detail. I certainly do. I like to make savings where I can, because then I can spend those savings on things rather more exciting and entertaining than car insurance.
I check the policy detail. Where is the car kept overnight? Is it alarmed? How is it used? I even look at the excess payable on each claim. I’ve had my Range Rover for over eight years and I know I can get most parts at very low cost second hand or from online spares specialists and my local mechanic can fit them at rates well below those demanded by the main dealer. I don’t need insurance for that, and if I’m involved in a minor scrape, I’ll sort it out myself to avoid pushing my premiums up.
Therefore, when it comes to looking at the excess I’m willing to pay on any claims I actually do make, I push it as high as the insurance company will allow. That drives my premiums down, and because I’m a careful driver and I can afford to sort out any minor scrapes myself, I save significant amounts over the years.
In short, I carefully assess exactly how much cover I need, and make sure I’m not buying cover where it’s not necessary.
Don’t need it? Don’t buy it!
Similar principles apply to networks. Take a look at your telephone and technical support. This is an area in which many businesses have much more wide-ranging cover than they actually need. Of course, for some parts of your network you may well need such support, especially if you aren’t always around and your team aren’t as technically proficient as you. Indeed, a few years ago, when money was less of an issue than it is today, it was commonplace for telephone support to be included in every hardware support contract.
Finances are rather tighter nowadays, though. I speak on a regular basis with network managers from a wide variety of sectors, and the common story from all at present is that budgets are under pressure, frozen or even cut. They have hardly any room for manoeuvre, and when that unexpected (and unplanned) requirement arises, they find themselves having to go to great lengths to justify the additional expenditure. When the network is down and the phone is ringing off the hook, that’s not good.
Cut cost, not value
It makes good sense, then, to evaluate carefully exactly what does, and what does not require telephone support. For much of your network, a simple break-fix contract may be entirely sufficient. Pull together a list of everything that needs hardware cover but doesn’t warrant telephone support. Technologies such as routers and switches aren’t the rocket science they used to be, and where you don’t need telephone support, there’s precious little point in buying it. Doing so adds significant cost but no value: move such devices onto straightforward break-fix support.
Take your list to your maintenance supplier and ask for a reduced quote in the light of the reduced telephone support: on some devices the saving could be as much as 50%.
So this month’s money-saving tip is this: don’t just renew your maintenance contracts each year. Scrutinise them. Check that you’re with the supplier who can give you the best deal, make sure they’re giving you the best deal, and be ruthless in pulling out of the contract any support that you don’t actually need. Remember: if it’s old and you’re familiar with it, it should cost you less to maintain.
