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242 Wythe Ave #4, Brooklyn, NY 11249
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Value for Money Assessment

Getting Value for your Technology Investment

Quantifying Value

If you are like many business leaders, you look at the Technology line items on your budget and on your financial statements as a bit of necessary evil – just part of the cost of doing business. As IT Providers, we try to paint the money that you spend on on technology as an ‘Investment’. But doesn’t this infer that there should be some sort of RETURN on that investment? How do you quantify that return?

At Oxygen, we believe there are 3 ways to look at your technology investment to ensure you are getting the best bang for your buck… and perhaps even a return on your investment:

  1. Cost Optimization of existing IT expenditures
  2. Benchmarking IT Support Costs
  3. Driving Productivity & Profitability Enhancements

Cost Optimization of Existing IT Expenditures

It is not uncommon for Oxygen to be engaged by an organization to review their expenditures, only to find out that there are a number of expenditures that are unnecessary, or misaligned with the current state of the organization. Many of these situations occur simply by mistake, and can be rectified simply by dedicating some time to reviewing all existing technology-related expenditures. Any excess spending can either be redirected toward more appropriate investments, or simply enjoy the cost savings.

Here are just a few examples of ares of misspending that Oxygen has uncovered by completing a Value for Money Assessment:

  • A not-for-profit organization was still paying for internet services at their old location, as well as their new location – this had been happening for nearly 2 years, and had resulted in extra costs of nearly $5,000 – all the while their staff were suffering with an under-sized Internet connection at their current location. Cancelling the existing internet service allowed some of the money to be invested in upgrading their current Internet connection, while the rest was returned to the organization’s budget as cost savings
  • A 50 employee company had 36 servers running, which not only increased their software licensing costs, but also required extra time to support and maintain all of the different servers. Oxygen recommended a plan to consolidate the servers’ roles to take some strain off of their existing hardware, and enjoy a more streamlined environment. The number of servers were reduced to 7, while the savings in licensing and support costs over the first 15 months paid for the project, and then produced ongoing savings each year thereafter.
  • A mid-sized company had purchased printers for the majority of their staff at the request of some of their managers, but the costs of providing consumables and maintenance of all of these smaller printers was getting out of control. A review of the printing needs yielded that the ‘cost per page’ could be reduced by nearly 200% by consolidating to a few multi-function printers. This also reduced the amount of pages printed and ultimately saved the organization several thousand dollars per year without any noticeable productivity hit
  • A mid-sized company had purchased printers for the majority of their staff at the request of some of their managers, but the costs of providing consumables and maintenance of all of these smaller printers was getting out of control. A review of the printing needs yielded that the ‘cost per page’ could be reduced by nearly 200% by consolidating to a few multi-function printers. This also reduced the amount of pages printed and ultimately saved the organization several thousand dollars per year without any noticeable productivity hit
  • A large private-sector employer had been paying annual licensing fees for some IT tools that had never been deployed, and weren’t even needed! This saved the organization nearly $1,000 per month that was reinvested into leasing 30 new laptops for their staff – imagine, getting 30 ‘free’ laptops!
  • A small business was paying several hundreds of dollars per month in off-site backup charges for one of its employee’s 450GB music, video and picture collection that had been stored on the company’s servers. Not only was this expensive to back up, but the storage space was also straining the existing servers and a costly upgrade to expand storage space was being unnecessarily considered.

Benchmarking IT Support Costs

Every organization is different, so it can be difficult to determine the appropriate amount to spend on IT support costs, regardless of whether you have an in-house IT department or completely outsource the IT function. Many business leaders try to quantify this in the following ways:

  • Looking at salary surveys in the markets in which they operate to ensure they are paying the appropriate compensation to their IT staff
  • Asking their peers or others in their industry what they are paying for IT support
  • Seek competitive bids from other IT providers to determine they are not overspending on IT support
  • Establish an IT budget based on a percentage of revenue, and try to keep all IT expenditures within this amount

Oxygen takes a slightly different approach: by analyzing an average of approximately 50,000 service tickets across our 300+ customers over the last five years, we have established an acceptable formula to compute approximately how many support tickets should be generated by an organization based on the number and type of devices that existing within the organization’s environment. We can then apply an acceptable amount of time to resolve the service tickets – which can be either ‘requests’ (tickets that are initiated by users that can either be a move/add/change), ‘incidents’ (typically a service outage), or proactive/maintenance items – on a weighted basis depending on the device. This gives us an idea of how much time should be spent supporting an environment and we can compare that to the effort that is presently being expended to provide the support.

The above exercise can be very illuminating – Oxygen was engaged by an mid-sized organization with approximately 500 end users who employed an IT department of 5 people plus an IT Manager. The organization did have an IT ticketing system, however it had been underutilized because many of the users were resistant to creating tickets, and the IT technicians often didn’t track the work they were doing or create their own tickets. Using Oxygen’s formula, it was identified that only 1.63 FTEs (Full Time Equivalent positions) were required to support their organization and their users. At the request of the organization’s leadership team, Oxygen put forth a fully outsourced Managed Services proposal and ended up winning the business.

Over the course of the first year of the engagement, Oxygen was able to:

  • replace all of the existing infrastructure,
  • improve IT service levels,
  • implement an offsite backup solution and a Business Continuity / Disaster Recovery Plan,
  • document IT support procedures,
  • assist in streamlining other business processes…

…all for slightly less money than the organization had been previously spending on salaries!

Of course this doesn’t include the hardware that was purchased, but it DOES include all of the auxiliary services, such as AntiVirus/End Point Protection, Offsite Backup Services, Network Monitoring Managements Services, etc. The net result is the users have now gained confidence in the IT function, the IT infrastructure has stabilized and their data is protected, and they are not spending any more money than they were previously spending.

Driving Productivity & Profitability Enhancements

Over time, Oxygen becomes intimately familiar with our clients’ organizations and can put forth a number of recommendations to improve productivity and profitability. But there are always some ‘low-hanging’ fruit to explore:

  • Microsoft SharePoint allows your team to create central document repositories and workflows to handle document versioning and many other productivity functions
  • Video Conferencing & Instant Messaging Solutions with Microsoft Teams brings your team closer together, creating more channels of communication and can even reduce travel costs to your organization
  • A Bring Your Own Device (BYOD) can give your team members flexibility over the types of devices they work with, driving productivity through matching hardware with employees’ unique work styles / situations
  • Implementing Line of Business Applications that are tailored to your organization will help your team to be more productive and make it easier to manage your data, processes and employees
  • Data Analytics / Business Intelligence can provide analysis on various parts of an organization and drive changes in process, product development, or processes

Book your complimentary Value Assessment

Request a consultation with one of our Technology Success Strategists for a complimentary report on where you are getting value for your technology investment, and where you can demand more for your money

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