Saturday, 14 April 2012

Brass In pocket

If you do the Twitter thing, follow me at @hotpixUK

You might be like me in that you try to check or at least take an active, passing interest in your supermarket checkout bill, making sure that you did get that 3 for 2 offer etc. Let’s face it too, it pays to check.

This time of year is generally when you will be billed by all your IT system, support and application suppliers for their annual maintenance. So, it’s probably the most crucial time to check your billing, as once you have paid it, you may well have to wait another year to resolve any issues. Hopefully reading this post you might find a few hundred pounds in savings, if you find any more, I wouldn’t ask you for a cut, but please do contact me or comment, with what you discovered.

As often we find in everyday life, situations change. That gym membership may not be working for us if it’s dropped off to just a visit a month. Maybe we find we didn’t need all those Sky Sport channels after all... You know the drill! In these times of austerity we are all looking down the side of sofas for savings too, aren’t we?

It’s the same with some support contracts, particularly hardware. They can rollover from year to year, with nobody really questioning the benefits or in fact the risk of that support ever being required. For example, in the current climate of virtualisation, I have encountered RSL’s still paying hardware support on one or more servers, that are now virtualised and on the physical server where it now sits. Madness. Although something that can easily be overlooked, bringing in possible savings of several hundred pounds.

Going back ten or more years, it was often prudent to have printers, PC’s, workstations etc under some form of maintenance contract. These devices (the ‘tin’ as they are often called), have become little more than mere commodities. From a supplier viewpoint, they are generally supplied in bulk with ultra-thin margins. Profit is generated from adding value with configuration days or on-going maintenance contracts.

As these devices are now so cheap and fast to source, it can often be more prudent to keep a few on hand as spares, rather than shell out for annual maintenance. As annual maintenance also generally includes some annual RPI element too, over ten or more years it can easily have doubled, under weight of compound %ages. From a technology viewpoint it is also relatively simple to setup follow-me or wireless printing. This can reduce the number of devices considerably, with many organisations often opting now for just one printer per floor. Pence per print is reduced and so is overall cost, increasing ROI.

Carefully examine each of the items you are being billed for and reassess if you still need that service. In some cases, some services should be extended as well as others dropped. For example if virtualisation has meant that there is greater risk concentrated in specific areas.

Annual software maintenance is often one of the biggest outlays. This generally covers access to a reliable, accessible and efficient helpdesk and often access to upgrades etc for application areas such as your housing management system (HMS). If your IT staff or user teams question the quality of service you receive, or there are a number of outstanding issues, that are felt to not being resolved in a reasonable timeframe, this is an ideal time to bring it to your suppliers attention. There is no greater lever than holding up a £55K invoice in your accounts department, to help get some of your long standing issues some much needed attention.

HMS suppliers are always keen to declare modules ‘live’ or ‘signed off’. That does not mean that the housing organisation’s definition is quite the same as the supplier! In some cases, modules might be billed that realistically are not and have never been live from the customer viewpoint. Two that often come up are Planned Maintenance and Development. A couple of notorious areas for staff preferring spreadsheets and little local Access databases. If you have any doubt that any modules are actually live or not, look internally, (or engage outside help to), before discussing this with your supplier. Often the latter will only be pleased to offer some ‘free consultancy days’ to move the situation along, if annual maintenance for the module may continue at some point in the future.

Modules that require some aspect of setup can also suffer from this issue. Reporting can often be one. Business Objects could take many years before an appropriate universe was created and useful reports roll off the end. If there is evidence that you are being charged for modules or applications that are not live or not being used, assess if they can be dropped from your maintenance schedule.

Historic modules that are being supported as ‘read-only’ can also generate quite a bit of annual maintenance. Consider how many times a year they are being accessed. If annual support is £8K and the read-only system has just five enquiries a year, that’s costing an eye-watering £1,600 per query. In a case like that it might be better to have internal IT or a legacy database specialist strip out the data to a little SQL or Access database, making significant savings. Check if you still need these and drop what’s no longer needed, making alternative arrangements.

Lastly, RPI can really increase annual maintenance charges considerably. Often it can seem that you are buying the system again every three years. If you are happy with your system and current supplier, approach them to discuss a discount. Alternatively, a possible a donation of a discount to neighbourhood improvements or specific charitable projects. You will be surprised how far some suppliers will go on this. It’s a good news story for all parties and importantly, your residents and communities benefit.

If you are less than happy with your suppliers, do let them know. Having the opportunity to be flexible can be far cheaper than going to market, possibly in a tender situation. On the whole, I am sure that suppliers try their best to satisfy their customers. If they didn't, they would not be able to continue trading.

Read on to: How does your organisation interact with tenants/customers on Twitter?

Possibly, you would prefer to have the brass in your own pocket.

(c) Tony Smith, Acutance Consulting

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