Smart IT Budgeting

Tech 101: Smart IT budgeting - by Doris Cahill, Featured in The Zweig Letter.

Find out some ways that A/E firms can make the most of their information technology budgets.

Help! My IT budget needs a trim! What should I do— our firm needs to be current on software/hardware plus train our staff? How can we render new work in soft times, and remain competitive and competent at our jobs?

There’s not many A/E firms out there that cannot identify with this pain. Often change only happens due to pain. Change can be difficult and, by our own nature, we resist it. Best practices tell us different though. Its smart to plan, strategize, and analyze to get the most of your budget and needs. Its not simple to combat human nature, however, it is simple to make small behavioral changes that render better business choices.

High gas prices coupled with 1930 record stock market losses, it’s a stretch to talk upbeat when your talking about the U.S. economy. But, if you let the media sour you on the future, that’s not good at all. In all times— good or bad— there are ways A/E firms can take those tight overhead dollars, specifically information technology (IT) dollars, and make them work harder for the company.

The traditional overhead departments accounting and human resources are all too accustomed to “the scissors” in times of recession. Lay offs and reduced schedules are not uncommon. Mergers are also a result of shrinking markets and consolidations. It seems everything is on the table to be cut when it comes to owners needing to make immediate slashes in their company’s budgets. And, this recent round of tightening the belt is hitting IT departments. IT is under attack, but should it be?

IT seems to be a line item on the profit and loss that is always growing, thus we need to maintain its value. IT budgets CAN have a cost reduction and enhance the value of the dollar spent. Why, most A/E firms have a lot of technology right at their hands and with direction can get much more from those sunken investments. In others words, with a little analysis you can render better value.

So, what can A/E firms do to stretch out their IT dollars?

• Consider outsourcing to an IT company that has multiple levels of staff expertise. Hire a firm versus an individual to access broader skill sets that has industry experience.
• Review your software licensing agreements. You can reduce annual fees to your current size with most software companies. Software fees are based on licensing volume.
• If you’re retaining staff with low utilization, internal software training is a great use of their time. Most software firms offer affordable online training, or manuals with exercises.
• Look for improvements in operational IT efficiencies. For example, e-mailing documents reduces postage, paper, and the labor associated with photocopying. Increase all types of electronic transmissions, but keep spam to a minimum.
• Review warranty agreements on copiers, printers, and hardware for reasonableness.
• Consolidate telephone plans (personal digital assistants and cell phones) different phones and plans and devices save labor time to manage them.
• Consolidate and manage software placed on any computer and it will reduce IT time to maintain the computer.
• Improve your current CRM, document/filing management systems. (This is different from buying new software). How can atypical cut backs help your firm?
• Shifting valuable internal IT overhead labor to outsourcing
• Reallocation of overhead labor to more education or operational efficiencies
• Critical software updates that match the firm’s sizing allow you to stay current while at the same time reducing costs
• Simplify software versions and gadgets to tie up less IT time
• Implicit savings in supplies and material costs as you move to paperless
• Improving existing practices increases efficiencies and client communications

If you are seeking ways to cut corners and ways to get through to the next project or just past a temporary work stoppage, a strategic look at IT can render some windfall to enhance your firm’s position post recession. Or, one better be ready for the next project, with trained staff sooner rather than later.

Doris Cahill is president and CEO at DMC Accounting + Technology (Boston, MA), an accounting consultancy practice that provides assistance with implementation and training for the AEC industry. Contact her at (617) 779-8806.

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