Spend Matters welcomes this guest post from Gregg Spivack, Director of Client Services at NPI, a spend management consultancy, focused on eliminating overspending on IT, telecom and shipping.
IT support renewals don’t typically get a lot of love. The majority of companies go quietly into the night come renewal time, or enter half-hearted negotiations to get, at most, a 3% cost reduction. Meanwhile, support costs are eating up more and more of the IT budget. So, why aren’t IT and sourcing organizations paying more attention?
One answer is that support costs are difficult to manage. They’re usually dispersed across the enterprise and handled at various levels in the organization. It’s a painful and tedious effort to track down all the support, maintenance and subscription renewal spend – much less manage it strategically. But it can be worth it.
Taking control of your renewal spend requires getting in front of it. Consolidated visibility allows you to see the full scope of support costs across your IT portfolio and how many groups and people are involved in the “management” of this spend. This means identifying the budget owners and consumers of each purchase, then reviewing a standard set of questions – such as the following:
Customer Satisfaction - Are both business and IT owners pleased with the product/service? Are you pleased with certain aspects and not others? Are you pleased with the customer support for these products?
Cost History - Have you mapped out your annual increases since day 1 and compared it with your original purchase? You might discover that you're paying the equivalent of the original hardware or software cost every 2-3 years.
Options – Have you considered options for support knowing it isn't always an all-or-nothing decision? Besides third party support, many publishers and OEMs are creating more sophisticated relationships with their respective channels and allowing them to provide certified support (at a lower cost). If you’re interested in learning more about your support options, check out this blog post.
Support History - Have you reflected on your history of support inquiries and their severities? Are you keeping current with (and finding value in) patches and updates?
Asking these questions is the first step to reducing IT support costs. You may find you’re spending far more than you anticipated, or not receiving the quality of support you’re due. You may find you’re subscribing to a higher level of support than you need, or the opposite. Regardless, this exercise gives you the posture to do more than ask for a 3% fee reduction; it allows you have a real conversation about value, options and cost expectations – and create a justified, evidence-based path to savings.