According to Gartner, maintenance costs represent about 15 to 25% of total enterprise IT costs each year and IT procurement professionals are constantly being challenged to reduce and control these operational expenses. Other challenges include negotiating support and maintenance contracts with vendors, choosing the right level of service for various network components and managing various vendor contracts.
As a result, IT procurement professionals are increasingly evaluating used-hardware resellers and third-party maintenance providers to reduce costs and extend the functional life of existing IT assets.
With this in mind, here are five key best practices IT procurement managers should follow to reduce their business’ network support and maintenance costs:
Assess network growth projections, OEM support terminations, and areas to reduce costs
In-depth assessment of network assets and business objectives enables IT procurement professionals to identify mission-critical and secondary components. By assessing these areas, one can pinpoint opportunities to reduce costs, plan for future applications and network performance requirements, as well as determine alternative support options plus hardware, support and maintenance improvements.
Here it is critical for IT procurement professionals to have good documentation, inventory and a map of the network to help assess the best type of maintenance service level for each network component. Additionally, IT procurement professionals should have a good network plan in place to enable businesses to better meet goals with improved network design, equipment selection and by obtaining maintenance contracts.
Analyse existing maintenance and support contracts for appropriate SLAs
Two rules-of-thumb should be taken into consideration when determining maintenance service levels and associated costs. In analysing Service Level Agreements (SLAs), companies should rank network devices in order of their impact on the business.
The most critical devices require the highest service levels, while less important components can be supported at a lower maintenance level, or perhaps no maintenance at all if the company uses a sparing strategy to reduce downtime and costs. Another point to consider is whether an OEM’s “best endeavour” service guarantees are effective, especially when compared to many alternative support options, which comply with strict SLA guidelines including penalties for non-compliance.
Seek opportunities to extend equipment life
According to a Forrester Consulting Study, up to 79% of organisations refresh their wired network infrastructures every five years, based on industry averages guided by OEMs. In reality, companies can avoid both premature upgrade and change management costs by keeping viable gear in place for an extended lifecycle using an alternative support service.
Additionally, IT procurement professionals should take advantage of limited lifetime warranties for less critical or more stable parts of the network. Many of the lifetime warranties offered by vendors include hardware replacement or technical support and IT procurement professionals who take advantage of these can expect reduced support and maintenance costs.
Consolidate multiple maintenance contracts
The ability to coterminate and manage multi-vendor maintenance contracts through a single point of contact simplifies the process of determining and managing service contracts—regardless of OEM or service provider. Additionally, avoiding being locked in rigid multi-year contracts by vendors and instead opting for flexible monthly service agreements with a third-party provider enables organisations to tailor their support services based solely on business need.
IT procurement managers should negotiate with vendors to coterminate key contracts. Businesses with networks of more than 1,000 devices should invest in inventory and contract management tools—if their service provider doesn’t offer one—to help them gain better control of contracts.
Evaluate benefits of hybrid support services
The continuing rise in hybrid support services validates a growing trend for companies to leverage both OEM and independent, third-party maintenance (TPM) offerings to deliver the best value, capability, and affordability. Gartner recommends evaluating hardware support from used-hardware and TPM providers in any of the following categories: non-critical, post-warranty, end-of-sale or end-of-support. Third-party support is also well suited for devices with a high-product density as well as situations when flexible terms and conditions are required.
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A global e-commerce company, for example, slashed operating expenses on support for more than 100,000 network devices by embracing a hybrid services model, which blends OEM and NetSure support from Curvature. By reaping more than 50% cost savings over SMARTnet alone and extending the life of mature devices, the organisation reduced annual OPEX by more than $4 million.
Bringing it all together
The challenge many IT procurement professionals face is that enterprises do not put the same focus in negotiating the best prices for support and maintenance contracts as they do when purchasing network equipment. To reduce network maintenance costs, it’s critical to have a holistic approach to choosing the right level of service for network equipment.
By negotiating maintenance contracts, making the right assessments, and liaising with the appropriate third-party vendors, IT procurement professionals can cut as much as 50 to 90 percent on hardware maintenance and data centre support—without compromising network security, reliability or performance.
Sourced from Glenn Fassett, General Manager, International, Curvature