KÜRT – Data Recovery and Information Security

“It’s like they’re using an axe rather than a scalpel to operate with” – examples of corporate cost reduction

Last November KÜRT Zrt. began marketing its efficiency enhancement service package, which enables companies to significantly reduce their IT costs. KÜRT gave an assessment of the results of the projects implemented since the launch of the product at the March session of the regular IT Evenings event series, where the attending experts shared and discussed the often surprising and enlightening outcomes of these projects.

Perhaps the most important lesson of the efficiency enhancement projects run by KÜRT so far is that considerable costs and resources can be saved at every organisation, even after basic cost-saving measures have been implemented. With thoughtful preparation, substantial results can be achieved as early as in the short term, and even more so in the medium and long term. First of all, budgetary items must be prioritised by giving careful thought to their impact in the short, medium and long term. Existing items may be replaced with less expensive solutions and certain processes may be rescheduled.

“The results of the projects that we have completed in the past 2 months speak for themselves: in the short term, the companies that we looked at generally achieved cost savings of close to 10% through an outlay of 1-2% of the total IT budget, while in the medium and long term they can save 30-40% of their annual IT budget through a somewhat higher outlay”, said Dea Frankó Csuba, KÜRT’s director of marketing. She added that “KÜRT offers a 2-3 week survey, free of charge, which explores opportunities for optimisation and cost reduction at a given company or organisation. The product of the survey is a detailed document that provides accurate information on the increase in cost efficiency that can be realised in a particular area and through a particular intervention”.

Since the launch of the service, KÜRT Zrt, based on the experience it has gained in the market, has improved its cost reduction and efficiency enhancement package which, besides improving IT-process, IT-organisation and technology efficiency and achieving optimisation with regard to licences, support contracts and capacity and quota management, focuses on the factor that has proven to be most critical: management of the IT organisation and of the conflicts within it. According to KÜRT’s experts, this proved to be the “make or break” aspect in virtually every case. The long-term success of a particular consolidation and optimisation program often hinges on how conflicts are managed.

Owing to the economic crisis, every company must review their current corporate strategy. Although some companies may be able to implement new developments or expansion, most companies (either in the manufacturing or the service sector) cannot do more than revise their plans and expectations, due to the diminishing funds at their disposal. “We have recently seen several cases where companies and executives, well-known for their meticulous planning and attention to detail, have decided to cut costs drastically in order to mitigate the effects of the economic crisis. It was as if they were using an axe rather than a scalpel to operate with,” explains Miklós Márton, KÜRT’s director of sales.

Based on KÜRT’s experience, simple cost reduction methods do not yield the desired results in most cases, which is clearly due to a lack of careful thinking and a disregard for potential collateral damage. “In one case we were contacted by the management of a company asking us why they had not achieved the expected savings after they had drastically reduced their asset portfolio and headcount. In another case, the head of the company did not have a clear grasp of the actual operating costs of his company and was very surprised to learn from us that they had recently purchased twice as many storage devices as they actually needed,” added Sándor Horváth, a consultant at KÜRT Zrt.

Based on the studies conducted by KÜRT thus far, problems in cost efficiency are caused by a lack of, or a disregard for, business considerations, a lack of efficient corporate system models and ill-conceived decision-making mechanisms. The situation may be aggravated if the decision-makers do not receive adequate information about the products available on the market and about their compatibility with their particular system, or if groups within the organisation with differing interests begin lobbying. “A few months after our service package was launched we realised that one of our most important tasks in relation to such projects was to diagnose internal disagreements and conflicts of interest and to reduce these by as much as possible. As an independent consultant and third party, we’re in a far better position to do this than the company would be if it tried to solve the same problem inhouse”, said József Kmetty, KÜRT’s CEO.