Chron This Week: Save $176,000 by revamping IT

This week, The Chronicle of Philanthropy has a technology supplement section that has some very interesting articles this time.

The most provocative article is entitled “How a Small Nonprofit Made Simple Tech Tweaks and Saved $176,000.”

Well, one thing they did was reduce their staff from 10 to 4, so I can imagine that made a considerable difference in what they might have been spending, even before they made changes in their IT infrastructure. The staff reduction included the IT staff which they estimated cost them $10,000 a month.

But there are some intriguing technical ideas:

  • They dumped their existing file server for a virtual server hosted by Egnyte for $50.00 per month.
  • They changed their applications to Google Apps, which they estimate will cost them $400.00 per year. They estimated that their file server, backup capability and tech support contract for these items previously cost $3500 per month. (Wow!)
  • They estimate that they save $250 per month in electricity for the file server.
  • They estimate that they reduced their internet and telephone calls from $365 per month, via Comcast, to $55 for Comcast Internet service, and then $45 per month for internet phone service by TokTuMi for 4 users.
  • They changed from dedicated 4-user QuickBooks, to an online version of Quickbooks at $35.00 per month.
  • They said their web server was costing them $1030 per month, for a dedicated server at a hosted data center. This was changed to $500 per year for a hosted content-mangement system.

There are other changes in the article, including a conversion of their donor management system to Salesforce, and their credit card processor to Paypal.

Some of the arithmetic seems odd. Does a single file server really cost $250 a month in electricity? Assuming an average of 200 watts of power consumption  (My new Dell PowerEdge 110 with 4 hard drives is currently humming along at 93 watts as shown on the Watts-Up meter) …

30 days, times 24 hours is 720 hours.
720 hours times 200 watts is 144000 watt hours, or 144KWh
A kilowatt costs about 12 cents in our neck of the woods.
144 times .12 = $17.28

The change for the hosted web server certainly makes sense. I also agree that the expense, maintenance and aggravation of hosting eMail on your own server seems to be high, instead of having this dealt with by a remote eMail provider. On-line Quickbooks? I’m not sure; my one experience with the online QB was less than satisfying, and most bookkeepers that I know seem to prefer the standard Windows version hosted locally.

What is significant in the article is that it is an excellent example of how people re-think their business practices. Hopefully the changes will promote increased productivity and convenience, in addition to showing significant cost savings.

Check out the article.  What changes could you make in your IT infrastructure?

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