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IT support and service contracts ripe for savings

If you don't pay close attention to IT support, service and maintenance contracts, start now. Chances are your organization is paying more than it needs to.

To save money on annual IT support and service contracts, organizations must avoid going on autopilot and truly investigate these agreements. Doing so is a significant effort, but it can pay off in big savings.

Vendors and IT support and service providers are not going to do it, and if they do, it will be in their best interest -- not customers'. They are out to make a profit, and saving customers money isn't always going to make them money.

A costly mistake with IT support contracts

Technology changes faster than we would like, but IT support and service contracts often don't keep up. Imagine, if you will, a company 10 years ago paying a few thousand dollars for a dedicated 100 MB internet connection. A service like that is part of doing business, so when the bill comes in, nobody really questions it. It's passed off to accounting, or sent straight there, and treated no differently than the electrical or heating bill.

Managed services model for IT support
MSP IT support model

The problem is, unlike a utility, technology services and equipment change. Fast forward a few years, and that 100 MB connection is out of date. The company can replace it with a 1 GB fiber line for a fraction of the monthly cost. Why didn't that happen sooner? Oftentimes, the level of service and billing stay the same out of convenience, which can be a costly mistake.

Annual IT support contracts have trained IT professionals to accept the services we have. We did the research on the front end, and if the service doesn't change, then we just go on autopilot. We have to break the cycle of convenience and allocate additional time when each contract comes in to do some investigation. If we don't, we will be in this endless rut with no chance to change unless a major problem occurs.

Many organizations don't give IT people the time or latitude to investigate IT support and service contracts like they should.

Most people in IT will say they look at each contract and ensure it's the best deal, but how many really have time available to do that? Many organizations don't give IT people the time or latitude to investigate IT support and service contracts like they should. Others rely on vendors and service providers -- who have no incentive to switch customers to a better tier of service for less money -- to present options for new contracts.

It's easy to overlook charges

IT support and service contracts can be easy starting points for those looking to save money on renewals. More vendors enter the field each year and increase competition, which can help reduce prices. IT pros can take advantage by investigating what has changed and what is new in the market.

They also need to take a look at the details of any contract. For example, it is common for vendors to give away software for a free extended trial, and then charge customers, who never actually bought the software, on annual IT maintenance contracts. In organizations that have a lot of complex software contracts, it can be very easy to overlook additional line items like that.

Similar situations can happen with hardware contracts. It could be that software activates a new feature of the hardware that the customer didn't even ask for.

Finally, organizations have to take a look at whether the hardware or software they're paying for is still being used. Oddly enough, many companies pay for products and services they don't even have anymore just because it's easier than investigating the contract and how to terminate it.

This was last published in February 2018

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