Cost Savings Follow Up

Since I have had a lot of traffic going to my page on business cost saving ideas I thought that I would share other cost saving activities I have seen happening where I work. Our division has always pushed for generating and utilizing ideas from all levels within the organization, and the president is pushing everyone to come up with two cost saving ideas a month. He has set a goal that everyone in the company save two dollars a day. Our organization was lean to begin with, so now we are taking extraordinary steps to reduce overhead costs.

I work in IT, so I mostly see things that relate to information technologies. One big item that has been cut is printing. First, we removed almost all the color printers. Then, we started trimming down the number of monochrome printers. We have also switched to draft mode printing in order to save a small bit of toner on each print. And, I think that we have gone so far as to ask people to shake the toner cartridges to get every last bit of toner out of them. We also have reduced the number of business copiers that we have, which was a bigger savings since most of those fell under maintenance contracts.

Another huge expense is communications. The companies cell phone bill is in the range of hundreds of thousands of dollars, and they would like to at least cut it in half. We already have negotiated rate plans, so the next step was to simply reduce the number of phones. The first milestone was the elimination of all the floater and spare phones. After that each manager was asked to evaluate his employees' phone usage and take back phones from people who don't need them on a very regular basis. Now very few people still have corporate cellphones, not that the cellular companies should worry, as I have said before that reduction is apparently being offset by workers buying personal phones.

But, there are still quite a few people with Blackberrys. So, that is now one of our larger communication expenses, excluding the items that are hard to reduce such as dedicated lines. The company was always very strict on who would qualify for a Blackberry, so now comes the tough decisions. If the company pulls Blackberrys back, then they won't be able to get as much work from employees. But, it is tough to value that against the hard costs of paying for Blackberrys. I have suggested that our data security policy be loosened during these tough economic times so that the company may be able to have it's cake and eat it to. Currently, anyone who turns in their corporate Blackberry has no other way of accessing that type of data on the go. Even if an individual decides to buy his own smart phone, it is against our security policies to forward corporate communications to personal devices. Sure, an employee could ignore the policy and just do it. But, who is going to risk their job in order to help the company, that is a crazy predicament.

Moving to the topic of software, we are trying to reduce the amount of software that is installed. At first look, this may seem crazy, but so is life at a gigantic global company. The company purchased licenses for software, and most commercial software does not have associated maintenance fees, so there should be no ongoing costs. Right? Well, in our case the parent company in Germany manages all the software licenses, which itself doesn't make sense since the cost of software in Europe is frequently higher than it is in the US, but that's another topic. In any case, since the software is payed for at headquarters, they send us monthly bills for usage. Each software has a monthly fee for each installed copy. If an employee installs a piece of software for one day, his department will be charged for a month of usage. In order to reduce the amount of money that we are paying to headquarters we are trying to remove as much unused software as possible. Of course this could have a funny side effect. The parent company in Germany, who is feeling more financial pain than we are, may end up further in the hole if they can't act as quickly as we do to reduce what their overhead on this software. So, in the end, they may end up just charging us a higher monthly rate for software.

Our company also has larger software packages that require ongoing maintenance fees be paid to external companies. For these packages we are attempting to reduce the bill by dropping to lower levels of service. We may have server operating systems with service level agreements providing for 4 hour resolution windows, but because are systems are already redundant we may be able to get away with accepting a 24 or 48 hour resolution windows. This could drastically reduce our maintenance bills.

Our company is also doing everything it can to reduce energy consumption. The IT department has helped work towards this goal by finally utilizing the computers' inherent power saving features. We also encourage users to physically power down monitors and computers when they are not using them.

In general, we are doing everything we can do keep our money under our roof. The company fired the external cleaning company and now has internal employees perform the basics of that work. In IT we are drastically reducing the number of consultant hours used, which means that existing staff will have to learn some more varied and specialized skills. It also means that the business will have to go without some of the improvements it would like to see.

Those are the big actions that I can see occurring now, as I learn more I will write about what I learn.
Published: 2009-02-28