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How to Reduce Your Total Cost of Ownership

This is the conclusion to the article Is Your Total Cost of Ownership Minimised?

Typical Losses Caused by Slow Systems

Case Study 1

One company that we recently audited employs 35 staff and had just commissioned a new system. However there were serious performance issues from Day One.

When the audit was completed, the recommended increased investment required to bring the system up to a fully productive state had an R.O.I. (Return on Investment) time of less than 2 months.

Case Study 2

Another small company had grown considerably over 5 years, but was making less money than when the company was originally started with two directors.  An analysis by the directors found that 40% of productive time was being lost in a slow and complicated system installed after they took on more employees.

Case Study 3

A busy consulting company prided themselves with the cost saving they had made by getting multiple quotes, and selecting the price that appeared to be the best value.  They acknowledged the system they selected was not the fastest, but it was the best price.  To them, a slower system had no disadvantages since staff time was billable to the clients.  They were, however, forced to change this attitude when long standing clients started moving to competitors who were able to deliver the same results substantially quicker and at much lower cost.

It’s All in the Design Process

Sabre_IT_TransparencyAn efficient system requires proper design, and required the skills of a professional Business Analyst.  Note: a salesman is not a Business Analyst.

A Business Analyst is someone who takes the time to get a specific understanding of your business environment and the processes involved, the habits of the workforce for that industry type, a strong understanding of good work flow, and in depth knowledge of the technology available. Once they have this understanding, they can then make the best recommendations for your business needs now and allowing for anticipated growth.

Some IT companies may have systems that they are agents for. They may have installed dozens of them. They may believe that little analysis is required, as the solution was worked out long ago.

It is important to understand that technology is evolving fast. In today’s competitive environment, the IT industry is constantly finding better ways to do things.

My Recommendations

  • Be prepared to pay for professional Business Analysis.
  • Find a company you can work with, before you start talking projects or budgets.
  • Ask to see systems the company has already implemented and talk to their clients.
  • Ask the hard questions early on, and ask for specifics.
  • Don’t be afraid to set benchmarks as to how you think the system should perform.
  • Ask about their maintenance process and what the maintenance costs will be.
  • Don’t be afraid to invest more in a system if it lowers the Total Cost of Ownership.

Skimping on investment in your system is, as the old saying goes, “Penny wise and pound foolish”.

Sabre IT designs systems specific to their clients’ unique needs. Contact us today to discuss how we can help you streamline your business IT.

Author: Eric Donn