The SMB Cost Savings Trap

Tuesday, December 4, 2007
Posted by Andy Wendt
SMB IT Cost Saving Mistakes

Though well run firms of all sizes are always on the watch to cut costs and improve services they receive from their Information Technology (IT) vendors the SMB is particularly vulnerable to some common cost saving mistakes.

Below is a real life effort at cost savings for an SMB that turned into a money pit for a medium sized medical practice. The story was first posted on a website for a Nationwide Computer Service Company but I will try to add a bit more detail here that can help the SMB avoid making the same mistake.

So this story starts with a SMB in some what of a state of flux. The firm had just terminated the contract of the new office manager for unknown reasons after less than one year of service. The previous office manager had held the position for over ten years but was let go most likely for butting heads too often with a type A doctor, and partner in the practice, who thought he knew best how to manage the office.

Now without an office manager the previous mentioned type A doctor promptly started to make a few changes without consulting his long standing computer service company, because after all this is the same fellow who knows how best to manage his office, so of course he knows how best to manage his network.

The first change his computer service company became aware of was a change in the ISP providing internet service to the doctor's office. This change was undertaken by the good doctor to save his firm twenty dollars per month on the internet bill.

The computer service company was not consulted and was unaware of the move until the new ISP contacted them to arrange for onsite network support the day of the move.

The computer service company then asked about the plans to replace all the Cisco hardware that was provided at no charge by the previous ISP and they were told those boxes, such as expensive VPN devices and firewalls that were required for secure communications to their other branch and the local hospital, were the responsibility of the customer.

This of course was not even considered by the type A doctor as he really did not know as much about his network as he thought he did. He was also less than thrilled to learn that his move would require about 8 hours of onsite labor to change over his servers and other network device to a new range of static IP addresses provided by the new internet provider.

To wrap this up this SMB in their attempt to save twenty dollars a month made one critical mistake. They did not consult with their computer service company and in the end that oversight cost them over $5,000 in hardware and labor.

A single call to check out the feasibility of this move could have prevented the entire problem. But many SMB's, strapped with time constraints and busy schedules, act in haste to cut costs and many times these ill conceived, if not well intended, plans turn out to be a money pit.

Click here to read the story as it was first written under the title I.T. Cost Saving Pitfalls.

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