We talk a lot about hardware and software support on this blog – and for good reason. It’s eating up more and more of the IT budget and it’s difficult to manage. One of the main management challenges is that these renewals are often dispersed across the enterprise and handled at various levels in the organization. If this situation sounds familiar, here is some good news – most likely, centralizing the management of this spend can generate cost savings. (And by the way, IT subscription spend belongs in this discussion too...)
It can be a painful and tedious effort to track down all the support, maintenance and subscription renewal spend in your organization. But the payoff is worthwhile. Consolidated visibility allows you to see the full scope of these costs and how many groups and people are involved in the 'management' of this spend. With CIO and CFO backing, I've seen companies successfully identify, centralize and reduce this spend. This is in contrast to the majority of companies that quietly go into the night come renewal time, or enter half-hearted negotiations to get, at most, a 3% cost reduction.
Taking control of your renewal spend requires getting in front of it. This means identifying the budget owners and consumers of each purchase, then reviewing a standard set of questions. Here’s an excerpt from NPI’s playbook:
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 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?
In NPI’s experience, spending time on the questions above will uncover an interesting storyline or two. Perhaps you find you’re spending far more than you anticipated. Or, maybe you’re not receiving the quality of support you’re due. 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. In some cases, this results in significant savings – especially if you’re applying this discipline across your entire IT portfolio. Even if the vendor is hesitant to cut maintenance costs, you’ll know a lot more about their behavior, products, and options and will be a smarter IT consumer going forward.