How the Auto Industry Can Cut IT Support Spending in 2019
It’s that time of year…budget building time. Time to account for how last year’s budget was spent and make plans (and ROI models) for 2019.
Every budget has fixed items. Those expenses that never go down; on good years they are fixed, but most years we expect to increase spending just to maintain the status quo. Network maintenance is one of those items.
Maintaining network uptime is the top priority for IT leaders. Robust SLAs provide a sense of security. There is confidence in knowing that when a crisis hits, you can quickly deploy resources to resolve the issue and get your equipment and business back up and running. Budget is secondary to this security.
What if there was a way to cut your network maintenance spending by 20 or even 50 percent AND get better coverage?
Most organizations are overspending on network maintenance. On average, companies are spending 70 percent of their IT budgets just to maintain their current network. This happens because companies routinely renew support agreements without evaluating coverage levels and equipment against their current needs.
In a recent report from Gartner, the firm recommends that companies seeking to reduce IT spending while improving coverage collaborate with an independent provider to perform a maintenance optimization audit.
The automotive industry has enjoyed an uptick in growth in recent years. Efficient spending and budget management ensure that this growth enables a future-ready organization.
The automotive revenue pool will increase by 30 percent, adding up to $1.5 trillion. – McKinsey and Company (Click to Tweet)
A Word to the Big Four
Managing a large enterprise, like Chrysler Fiat, General Motors, Ford, or Volkswagen, demands a robust, secure, reliable network. Organizations of this size often maintain in-house networks spread over several locations.
Acquisitions and mergers make maintaining a clear handle on what is owned, what is covered, and how it is used challenging.
Disparate, location-based leadership and accountability further complicate the situation. In many cases, networks in each location are managed individually, and the company lacks a centralized understanding of assets and coverage as a whole.
This leads to significant overspending as IT leaders in each location operate independently. Spending on service level agreements balloons as a result of over- and double-coverage of equipment.
A goal without a plan is just a wish. – (Click to Tweet)
Supplying the Big Four
The suppliers that support the Big 4 are not immune from overspending on IT.
In fact, these organizations are often facing even greater challenges as they seek to maintain complex networks with small budgets and even smaller teams.
Maintaining an accurate list of network assets, coverage levels, and criticality definitions is overshadowed by daily firefights. Leaders struggle just to keep up with the demands of managing multiple, often international, teams while consistently delivering performance. Finding the budget to get a handle on their network maintenance and inventory is even more difficult.
Beneath every excuse lies a fear. Practice being fearless. – (Click to Tweet)
Finding Relief, Hidden Money, and Better Coverage
As Gartner points out, the first and best step to understanding network maintenance overspends is through an audit of the current state. Yet, many organizations resist this first step.
Three fears drive this resistance:
- Fear of exposure
- Fear of increased workload to develop an asset list
- Fear of loss of blanket coverage
Fear of Exposure
What happens when the audit reveals overspending? Won’t it be my fault?
First, network support agreements are purposefully complex.
Service providers (especially OEMs) develop contracts that include clauses, terms, and definitions that vary from platform to platform and are further modified by entitlements and equipment purchases.
The process is built to put the responsibility of diligent review on the purchaser. Much like buying car insurance, it is up to the buyer to know what needs to be covered and at what levels. OEMs do not keep track of your assets nor do they understand which assets are most critical to maintaining the flow of business.
Fear of Creating the Asset List
This is a legitimate fear for many organizations. Creating an asset list, especially if it has not been done in the past, is a time-consuming venture.
The good news?
A full asset list is NOT required to start an assessment.
Basic, easily accessible information is all that is needed to see how much the organization can save by optimizing service levels and coverage.
Fear of Losing Blanket Coverage
Blanket coverage is peace of mind.
It is so important that many businesses overpay just to get it.
Optimizing support is not about losing peace of mind. In fact, it is just the opposite.
Maintenance optimization audits reveal areas of the network that may actually be undercovered while simultaneously alerting you to equipment that is covered by multiple SLAs or an SLA and entitled support.
Just because your support costs are going up does not mean that critical equipment is better covered.
Keep Blanket Coverage AND Spend Less on Support
Before submitting budget requests for 2019, speak to an independent support expert. One that understands how OEM, third-party, and independent service agreements are structured.
Experts with a proven record of helping organizations of all sizes realize significant network support savings without compromising on coverage.
Arch Technology Solutions offers a range of assessments. Start with a free self-assessment to see just how much your organization stands to save by optimizing coverage. No asset lists or access to sensitive data required.
The results may surprise you.
If they do, know that you have experts in your corner who are prepared to effectively and efficiently assess your network coverage and optimize your support to free-up 2019 budgets.
Topics: Service Level Agreements, IT Maintenance