How to Cut Expenses with Technology

Today's challenging economy is forcing enterprises to find ways to cut expenses. IT professionals can cut costs using technologies such as software as a service, virtualization, Web conferencing and voice over IP. Knowledge Center contributor Joe Ruck explains why enterprises should consider these and other solutions in order to cut costs now.

Just in case you didn't get the memo, it's official: you have to cut costs now. Here are seven ways technology can help. They may not apply to every situation, but you should at least consider them for your company.

1. Choose SAAS (software as a service)

Don't spend time and money developing your own new application or purchasing an on-premise system unless you absolutely have to. Salesforce.com is the poster child for SAAS success, but today almost every application area has SAAS options available. The benefits of no capital outlay, immediate implementation and minimal internal support requirements are well known.

What is less appreciated is that SAAS systems are accessible from anywhere, allowing remote and/or home working to an extent not possible with on-premise systems that require a separate, expensive and sometimes unreliable VPN to be used remotely. This can cut down on unnecessary travel.

2. Go virtual

Do you still need to manage some in-house applications? Then look at virtualization. Audit your racks of equipment for utilization and combine under-utilized servers onto a single machine with virtualization. An alternative take on this is to simply launch new services on Virtualized Private Servers (VPS). If they are successful and demand soars, turn up the VPS or bring it in-house. Either way you win, since you control your costs from the get-go.

3. Use Web conferencing

Only five years ago, Web conferencing was a hit-and-miss affair. Loading up the software took forever. Once (and if) loaded, it often failed to cut through the corporate firewall, resulting in a user experience that was not unlike slogging through an unabbreviated version of "War and Peace." Today, that has all changed. Today's Web conferencing works well. With high bandwidth the norm rather than the exception, participating in a Web conference is as interactive as being physically present-and at an infinitesimally small fraction of the cost of air travel.

4. Or don't use Web conferencing

One of my employees used to conduct analyst updates by e-mailing the presentation in advance and then stepping through it over the phone ("Now go to the next slide, you should now be on slide 5", etc.). This works surprisingly well. Realistically, almost everybody in business has PowerPoint and if not, you can convert to PDF. This approach is for those who are truly strapped, because the cost is so low and the productivity benefit so tangible.

5. Use VOIP (voice over IP)

Use VOIP services rather than telephone. This doesn't work in all cases and does require high bandwidth. For most companies, though, there is little reason not to use VOIP for internal calls at least. This is especially important for international calls. Another alternative is Skype. If you're not familiar with Skype, ask your kids for a demo. Quality varies from call to call but it's free.

6. Choose the right freeware

It's tempting, and it seems counterintuitive not to take advantage of any free services that are available, but beware. The issues with free services are that you have no practical legal control or redress if something goes wrong, and "free-to-you" usually means "advertising-supported-to-them."

For example, GoogleApps analyze your content to target their advertisements. That means losing all privacy-and that could cost you the company.

7. Ignore obsolescence

Just because a computer is old doesn't mean it's useless. I remember once being struck that Fry's-a famous electronics store here in Silicon Valley-had running for its stock control system an old, character-based DOS application running on an equally-decrepit early 1990s vintage PC. It looked incongruous next to all the shiny new PCs and Macs.

But if all you want is to answer the customer question "Do you have a XXX-3452 in stock?", then this computer works just fine. The collective cold shoulder that business has given to Microsoft's Vista is a good example of this happening today, but you can take it further. Too many technology investments are made on emotional rather than financial grounds. Be especially wary of true but irrelevant statements such as "But it's now more than 15 years old."

So am I, but everything still works just fine.

 Joe Ruck is President and CEO of BoardVantage. Joe has led many high technology companies through successful growth to IPO or acquisition. Prior to joining BoardVantage, Joe was Senior Vice President of Marketing at Interwoven and part of the team that drove the company through one of the most successful IPOs of 1999. Previously, Joe held sales, marketing and executive positions at Sun Microsystems, Network Appliance and Genesys Telecommunications (subsequently acquired by Alcatel).

Joe holds a BS in Engineering from Oregon State University and an MBA from Santa Clara University. He can be reached at jruck@boardvantage.com.