There isn't an area of technology management where cost is
not a factor.
For many organizations, maintenance costs are a necessary evil, especially when
certain customer-facing systems are crucial to business. But eliminating industry-standard
4-hour turnaround times in most hardware maintenance contracts is a risk many
CFOs and some CIOs are willing to take during a recession. If it's not
considered crucial, you can wager that someone in the board room is looking for
ways to cut it out completely—or at least cut it down.
Sometimes, though, cost-cutting comes back to bite you on the back side when
internal systems move at a snail's pace and worker productivity is
detrimentally affected. Here's an example from the Computerworld article "Slashing IT
maintenance budgets: Sign of the times":
"A network accelerator, which compresses traffic to get
more speed over the network, recently broke at the sporting-goods firm (a large
Midwestern sporting goods manufacturer). IT couldn't call the vendor to fix it,
the engineer said, because there's no longer a maintenance contract on it. So
his company began looking for a used replacement on eBay. 'We lived without the
extra speed while it was being replaced; everything just slowed down,' he said.
The device has since been replaced.
"For their part, end users 'were noticing the cuts,'
he said. 'The network slowed down ... and people don't like that.' That caused
new trouble tickets to be generated due to speed complaints, which overloaded
the IT staff with even more work.
"'They're generally OK when they're told it's going
to hurt,' he said of cuts and their effects on company workers. 'Then when it
hurts, they don't like it. We spent some time in meetings where we had to
remind people that they agreed to this' when the cuts were looming. 'Everyone
wants a fuel-efficient car, but they still want it to go fast.'"
It's hard to argue with the logic that says companies need to trim at every
level of an organization. The caveat is understanding what is crucial to
revenue and what is crucial to supporting revenue. Sometimes the two are very
much in competition as they are seen as customer-centric versus an internal
process. Many of those internal processes may not make the company money, but
rather, may keep the company from losing revenue as it relates to rolling out a
new product, of answering a client need or allowing a development team to work
efficiently while on a key project. Understanding how to best balance the
performance of everything (worker productivity, revenue, project efficiency,
systems, etc.) is complex.
Having some built-in hardware and software failover capabilities and
redundancies should help. But sometimes, things completely fail or die, and you
are simply going to need to call in a vendor, and without a current maintenance
contract, the company will be charged generally exorbitant hourly rates to fix.
It's a tough situation.
Another issue is that maintenance costs themselves, while similar to insurance
policies, are very high in terms of monthly costs and can be difficult to
negotiate when the economy is good. Recessions change that a bit.
From the same article:
"'Vendors
have been lobbying us really hard' to reinstitute the maintenance contracts, 'giving
us discounts, and are starting to soften policies and prices to try to get us
back.' In the future, maintenance contracts will once again become the norm in
his company as new gear is purchased, he [the IT worker from the sporting goods
firm] believes. 'For the old stuff that's already in place, [though,] I don't
see it coming back.'"
IT Management News & Reviews 
