Telecoms and Other Sectors Can Target Cost-Cutting Initiatives with Operational and Sustainability Upsides
It’s fair to say that whatever budget a company had in place for FY2020, some coronavirus-driven changes have been necessary. For about one in five businesses—mostly those supporting remote work tools and other hot commodities—COVID-19 has unleashed dollars. But for a large majority of enterprises dealing with revenue downturns and long-term uncertainty, the budget has become a battleground.
To make smart cost-cutting adjustments without harming the business’ long-term prospects, you need good data. Fortunately, Sagent gives Fortune 500 companies, telecom network operators, government entities, and even hardware OEMs access to data points they can use to chart a path toward lower spending, greater profitability, and decreased environmental impact, regardless of the economic backdrop.
A Shifting Outlook for the IT Budget
After predicting respectable growth in IT spending for 2020, revised guidance from IDC is now for an overall drop of 5.1 percent by the end of December, and Gartner pegs the decline at a more pessimistic 8 percent. In the telecom sector specifically, about 70 percent of companies say their employment budget will be affected by adverse coronavirus impacts, so staffing IT necessities and strategic projects may become more difficult in the coming days.
Longer term, significant uncertainty remains about whether the virus could abate in time for a late-2020 rebound; additional waves could put off recovery until mid-2021, resulting in a 5 percent downturn next year; or worst case, the crisis could extend well into 2021 with unknowable consequences.
With these types of scenarios being run in every Finance Department, IT leaders are under pressure to identify savings that will help companies withstand recessionary forces while positioning themselves to bounce back as soon as COVID-19 recedes.
Low-Impact Cost-Cutting…We Can Do Better Than That
When budget-cutting conversations begin, they often center on finding areas to reduce spending that will have minimal impact on the business. With luck, some surgical excision of overlooked waste will blunt the consequences, and carefully targeted reductions in equipment investments, staffing, and other areas can be managed without too much damage.
With Sagent and our Sagent Insights business intelligence tool, however, there is another option—saving money and realizing positive operational and environmental impact. Yes, today’s budget crunch could actually pay off.
How is that possible? Let us give you just one example.
Slashing Avoidable Repair Incidents
Did you know, approximately one in three network-related hardware repair events is completely avoidable? It’s true. Sagent provides full-service break/fix for a wide variety of clients, and one-third of equipment that comes to our facility for repair is perfectly functional.
Large network operators, including telecoms, will immediately grasp the significance—millions of dollars of unnecessary expenditures every single year. And that off-the-cuff estimate may not reflect the true extent of the overspend, which includes:
- The truck roll to the site to evaluate and decommission the equipment
- Technician time invested in ineffectual break/fix, patch update, or reconfiguration attempts
- Spares depletion to install a replacement while the “malfunctioning” hardware is fixed
- Logistics associated with equipment deliver to a repair facility
- Management costs of dealing with the warranty coverage or overseeing the repair vendor
- Additional logistics and truck rolls to put the repaired hardware back in service
Clearly, inaccurate field diagnoses are expensive! But Sagent Insights helps you identify where and how avoidable repair events are arising so effective countermeasures can be put in place.
First of all, we track every detail: OEM, product model, warranty status, root cause of failure, cost of repair, technician(s) involved in diagnosis—you name it, we know it. Then we provide intuitive visual tools to help analyze this data, along with our own expertise in deriving insights from it.
A common outcome would be something like this:
- Technicians in the Northeast Region are misdiagnosing a configuration issue with a particular model of switch, resulting in numerous functional systems being sent in for repair.
- Sagent identifies the problem—a potential training misstep in the region that has left field engineers unprepared to deal with this product.
- We document the correct process for diagnosing the problem and work with the client to create resources and training updates to boost technicians’ skills.
- Very rapidly, avoidable repairs on the switch decline, and Sagent moves on to finding the next target of opportunity to save money.
But Wait, There’s More!
Slashing avoidable repairs is only one way Sagent Insights helps cut costs and the carbon footprint (think of all those truck rolls you’ll eliminate!). We can also:
- Identify when another repair on a piece of gear is worth the investment and when an upgrade would be more cost-efficient.
- Leverage full-lifecycle data to guide acquisition toward hardware with the greatest reliability and lowest TCO, so you stop wasting money on “lemons.”
- Empower clients to leverage the circular economy (the “green market”) to generate revenues on the used equipment they would otherwise send straight to the reclamation facility.
There are countless ways to use Sagent Insights to realize significant cost-savings without negative operational impacts—and you can improve the company’s sustainability profile at the same time.
So if you’re facing budget challenges, why not see them as an opportunity to transform your network support, break/fix, and lifecycle management processes for beneficial, long-term impact? Why not talk to Sagent and get some insights today?