This year I'm definitely going to . . .

Start the new year by considering these money- saving projects recommended by peers.

By Ann Bednarz and Denise Dubie
Network World, 01/07/02

Still looking to add to your New Year's resolution list? We asked network executives and industry experts to share their favorite budget-management advice and cost-cutting tips. Perhaps you'll find some worth your resolve:

1. Retire old gear.

At Komatsu America International, there's a very old, overworked server that runs two instances of SAP software, plus nightly back-up procedures. "The server has peaked in its usefulness, so I am proposing to replace it with a much more current version," says Bill Verzal, senior Unix administrator and chief architect of AIX systems at Komatsu. A new server could deliver a tenfold performance increase, free up 50% of the company's back-up window, and save roughly $30,000 per year in licensing costs - which in two years would recoup the cost of the new server - Verzal says.

2. Centralize global IT systems.

Troy Tate's first goal in 2002 is to standardize the network hardware, software and processes at CTS' 18 national and global offices. The corporate network manager says each location maintains its own e-mail, internal network and IS structure, making CTS appear - in terms of its network - like 18 separate companies, rather than one cohesive team. Tate has not yet determined the amount of savings potential, but the company expects within three years to have reduced costs and consolidated resources by centralizing the IT infrastructure. "We feel like we're generations behind because we have not been able to leverage the economies of scale. We need to get a central support contract, a central purchase order for hardware and software. If we get it all in order, under one umbrella, we'll see some quite significant savings," he says.

3. Look for revenue opportunities in IT.

Like its state agency peers, the University of South Florida is undergoing budget cuts, and USF's IT department is no exception, says Christopher Akin, manager of e-commerce at the university. So the IT department is launching a plan to market its services outside the university to make it more self-sufficient and supplement lost state dollars, Akin says. For example, USF will offer telecommunication, hosting and Web and development services to civil and education agencies. "We are able to easily transfer to this business model due to our well-established presence in the community, excellent technical staff and existing data center facilities," Akin says.

4. Streamline order management.

Thomas Wagenhauser says in 2002 he will nearly double the IT budget at Harlan Bakeries in Avon, Ind., but within a year the company will see a return on investment that will make it all worthwhile. Wagenhauser, director of IT at the baked-goods distributor, will invest about $12,000 in RightFax fax server software from Captaris to process faxed orders. "We've figured within a year we'll save enough time with the software it will equal one employee," he says. Wagenhauser estimates the savings at $25,000, and also notes that with the increase in staff productivity the baker will be able to take more orders and generate more revenue.

In the company's warehouses, Wagenhauser will implement warehouse management software that will cost about $200,000 but reduce human error and cut down manual inventory checks. "We've had some problems with lost inventory and information that was never written down. This software will keep track of what we have in real time," he says.

5. Reduce manual software rollouts.

Mike Lane is a network engineer at Western Bank, which merged with parent bank Washington Mutual. The bank's primary money-saving initiative for 2002 is rolling out a software distribution application and a replication product for its Novell servers. For software distribution, Lane's company is evaluating Novell's ZENworks and Marimba's Software Distribution module and hopes to have one or the other deployed in the first half of this year to save time troubleshooting, rolling out and maintaining software. "A lot of the savings is in [the] soft-dollars form of man-hours and increased uptime at our branches," he says. The company also plans to replace its Windows 95/98/NT workstations with Windows XP and Office XP. "Microsoft [says] we'll save money that way, but the jury's still out," he says.

6. Auction excess IT gear.

After company layoffs freed up some PCs, power transmission equipment maker Flender auctioned off its surplus gear to employees. MIS Manager Richard Ankenbrandt jokes that the $260 raised in the auction is his department's budget increase for the year. Sure, it's not much, but the search for small savings can set an example that will lead to greater returns. Sellers and buyers turning to auction sites such as eBay are doing more business than ever. Last year, sales in eBay's computers/IT and consumer electronics categories topped $1.4 billion - a 70% increase over eBay's 2000 numbers.

7. Think wireless.

Oli Thordarson says going wireless will save his company cash in the coming year. Alvaka Networks, a management service provider (MSP) , will equip its field engineers with Research In Motion BlackBerry 957 wireless devices. Thordarson, CEO, plans to give employees access to their Microsoft Outlook e-mail and schedules, as well as a customer contact database. "The wireless project will cut about three or four days of latency out of our billing documents, and by getting away from written documents, fewer errors will occur," he says. The MSP expects to save 15% in labor costs and net roughly $2,000 per month in productivity gains.

8. Weed out Web content.

One-third or more of the page content of Web sites and intranets is redundant, says Mark Raskino, research director at Gartner. Content is expensive to create and manage - then a large portion of it just sits unused, taking up server space, muddying navigation and reducing search engine effectiveness. Over the long term, companies can deploy content-management products to get control of content costs, and create a content-aging policy, Raskino says. In the short term, they should remove unused and out-of-date content, archiving it just in case, he suggests.

9. Free up help desk resources.

Every month, service desk staffers at Penn Mutual Life Insurance handle 2,000 inquiries, 9% of which are from internal users requesting assistance with their passwords, says Nancy Alter, director of IT customer support. Using Courion's PasswordCourier software, which lets corporate users reset their own passwords, Penn Mutual will free its IT staff to address more complex issues - and save approximately $17,000 per month through productivity gains, the company estimates.

10. Clean out your IT toolbox.

Many companies are overstocked with tools they were not ready for and that are now gathering dust, says Gartner analyst Bill Gassman. Common culprits are complex event-management and inventory applications. Yearly maintenance can be 20% of the software purchase price, plus hardware depreciation and supporting software costs. "Make it a New Year's resolution to take a census of network and system management tools in use and resolve to eliminate at least one tool that has become 'shelfware' or is grossly underperforming in relation to its ongoing cost," Gassman says.