Consolidate servers. "One of the most efficient cost reductions has been server consolidation," says Rob Hegarty, vice president of the securities and investments practice at TowerGroup. "You can go from multiple systems that perform the same thing down to one or two systems." That's particularly the case for investment firms that have recently gone through a merger-and-acquisitions spree. "There's a lot of waste and duplication."
Consider outsourcing. Outsourcing is high on the agenda for reducing maintenance costs. As applications get older, they become harder to maintain. By outsourcing new development, Asiff Hirji, CIO at Ameritrade, says, "The natural effect of that is a lower cost of maintenance.
Examine maintenance contracts. Consolidating or eliminating office equipment can result in significant cost savings. Stan Eng, senior vice president and chief technology officer at Richardson Financial Partners, says that "one of the things that's been a sore point for me is color printers." He says the cost of maintaining them can be almost as much as the printers themselves. "We've been getting rid of some of those devices" and electing not to go with maintenance contracts, he says.
The bottom line, says Hegarty, is that when firms are "looking at maintenance, the big goal is to reduce costs without reducing the service level - you have to be very careful not to throw the baby out with the bath water as you try to reduce costs." It doesn't help to reduce a budget by 4 percent if the system is down five times a week, he says.
