Everyone knows that the economic conditions in the US are tough right now, and there are indications that conditions will further degrade before eventually improving. Most people and business have already adjusted their spending habits in order to ride out the economic storm. But, for some industries, just implementing the easy cost savings ideas may not be enough for them to make it through. I work for a company that relies heavily on the big US automakers. And, I conceive that even if the government rides in with bags of money for our sector, there will still be weak companies which will fail.

Will my company be one that fails? It's hard to say. We are a private company, so the books are closed. There is no way to truly know what the company's financial health is. But, since I rely on my income from this business, it is in my best interest to give every effort towards ensuring that the company does make it through. To that end, I have brainstormed ideas for cutting costs in IT (information technologies), and I have forwarded these on to our North American CIO. However, the headquarters for our company is in Germany and that is where the real technology decisions are made. And, they are generally less receptive to ideas that originate outside of Germany, especially when those ideas run counter to their existing strategy. I am afraid that the strategy, designed in good economic times, will only be modified once pain from the economic crisis increases in our sector. At that time it may be to late to implement these drastic ideas.

Since I am fairly certain that my ideas will be largely brushed to the side, I decided to post them here in case they may be of use to some other company. These ideas may not be applicable outside of IT, and even in IT there may be areas where implementing these ideas would not make sense. But, the overall goal is to reduce the costs as much as possible even if it does not present a "one size fits all" situation.

Give the staff incentives to use their own cell phones.
Many people in the IT department have both business and personal phones. The company wants to be sure that they can get a hold of staff when they need to, so they issue cell phones. But, the staff doesn't want to be put in the position of having to answer for having to many personal phone calls, so they normally also carry a personal phone. My proposal is to ditch the corporate phones and encourage the staff to use their own phones for work purposes. The company could conceivably cut costs in half if they figure out the annual cost of corporate phones per person, and then give half of that to the employees to encourage them to use their own phones. A lot of details would need to be worked out in order to implement this, but it could present a win-win situation.

Use cell phones instead of land line phones.
At home I have stripped my land line phone down to the bare basics. My wife and I both have cell phones, so the only reason to keep the hard line phone is for our children who are not quite old enough to have cell phones yet. At work I spend a good amount of time away from my desk and prefer to communicate via my cell phone, and I see few reasons to maintain a desk phone. One reason for keeping a desk phone is that if I leave the company no one would want user calls to keep coming to me, but since we have a service desk all user calls are going through them. Normally, it is only colleagues who call on my cell phone, and if I were to leave my colleagues would know to no longer call.

Open the windows and shut off the lights.
Over a year ago I went through my house and replaced old incandescent lights with compact fluorescent ones. At work we have always used fluorescent lights, but we also have an open office plan with plenty of windows. So, why not shut the lights off and open the blinds. A few years ago our plant replaced the sodium lights with fluorescent ones, then latter we added skylights and installed equipment to change the number of lights that were on based on what ambient light is available from the outside. In the offices we could take a similar, but manual approach to this.

Embrace the use of open source software.
Our company uses Microsoft Office extensively and pays huge sums of money for licensing it. We have always used Microsoft Office, and I am not aware of us ever evaluating anything else. That in itself is interesting, the purchasing department is always evaluating our material suppliers and looking for better opportunities, but not in regards to software. I am confident that by switching to Open Office we could save substantial amounts of money while not loosing much functionality. And, the switch should be fairly painless since the files are compatible. Office suites are just one example, with more research I'm sure that we could identify other opportunities to cut software costs. I have already convinced our software team to look at Paint.Net and GIMP as replacements to the expensive Adobe products for people who don't need
all the power Adobe provides.

Outsource email handling to Google.
We spend a lot of money for our email infrastructure. Not only do we use internal exchange servers with huge file stores and mail filtering, but we also pay an external firm to filter our mail before it reaches our servers. We could simplify the situation and reduce our costs by outsourcing these functions to Google by using Google Apps for Business. I believe that Washington DC has already done this for it's 38,000 employees. And, that they also use many of the other online Google services as well. The biggest hurdle is swallowing the fact that an outside company would be storing our email. I know that when times get tough the leanest companies survive, so what is the value of our intellectual property if holding on to it costs us our business?

Create a new hardware strategy.
Currently, our parent in Germany strictly controls which hardware that we use. The IT department can only purchase equipment off of an approved list. This is not just for volume pricing reasons, but also because the hardware has to be validated to work with the range of software that we use. If we implemented a strategy that took advantage of terminal servers we could reduce this burden. Terminal servers could be set up to host all of our critical business applications, then we would only need PCs and laptops that were capable of running the terminal server client. We could then buy cheaper equipment, employ used hardware, and we could extend the life of existing hardware. We could even allow employees to use their own equipment.

Create a new software strategy.
When evaluating software we should give preference to web-based software solutions. If we chose applications that were web-based, then they would not be tied to hardware constraints. Making smart software choices would allow us to have more flexibility in our hardware choices as well. This would also open up options for hosting applications on "the cloud" (outsource our intranet and web application servers) in the future.

2008-03-14
For more cost saving ideas, you may be interested in reading my cost savings follow up.

Tags: Blogger Ideas Frugality

Published: 2008-11-09