How to make the most of your IT budget

Few organizations have to pinch pennies more than nonprofits, which depend on charitable giving and grants for their funding. We asked IT executives from three well-known nonprofits to share their creative ideas for getting the most mileage from their IT budgets. IT leaders in all industries can learn from these techniques.

1. Consolidate servers.

When Dennis Shaw joined the Smithsonian Institution, in 2000 as its first CIO, the museum group had 149 file, print, e-mail and directory servers, connected to 80 LANs. Some were so old that they used 386 processors. Shaw came up with a two-step plan for standardizing on NetWare and reducing the number of servers to 76, which were then clustered to eliminate points of failure. This server consolidation, which took more than three years, has improved availability and reliability while also reducing costs. "The savings are in cost-avoidances related to maintaining and replacing servers," Shaw says. "We saved money on hardware and software licenses, too."

Additional savings came from eliminating a third shift of IT workers and reducing the second shift to one person. With newer, more reliable servers, Shaw can meet his service commitments with fewer people. "During normal business hours, we are providing 99.998 percent availability," he says.

2. Don't delay equipment upgrades.

Jim Thie was hired as Habitat for Humanity's first CIO in 2005 to help bring standard business practices to this Christian organization in Americus, Ga., that builds homes for the poor.

That's one reason Thie is sticking with standard equipment refresh rates: Laptops are replaced every three years, and desktops and servers are replaced every four years. "Just because we're nonprofit doesn't mean that we have less computing needs or needs for power," he says. "Constant tech refresh allows us to keep up with demand." Stretching out the technology refresh cycle drives up an organization's maintenance costs and reduces reliability, Thie says.

3. Replace old phone systems with VOIP.

The Smithsonian once had a hodgepodge of telephone systems, including Centrex, PBX and old-fashioned key systems. Verizon notified Shaw that it refused to maintain 70 percent of the organization's telephone systems, because they were too old. In 2002, he embarked on a VOIP project and selected Cisco IP PBXs and phones.

"At the time, Cisco was the most mature of the VOIP products," Shaw says. "But we probably would have picked them anyways because we had Cisco routers and switches. Our backbone network is all Cisco." By migrating to VOIP, the Smithsonian has reduced the annual cost of its voice services by US$2.3 million per year -- so far. When the VOIP systems are fully implemented later this year, the annual savings will rise to more than US$3 million per year. "What really swung the decision to VOIP was the cost of the cable plant," Shaw says. "We'd already made that investment in our data network, but our telephone cabling was old. In the National Museum of Natural History, the telephone cables were over 50 years old. The economics clearly indicated we should go to VOIP."

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