By nature, business owners are always looking to reduce costs. Looking at the information technology budget line items can sometimes be headache inducing. So much money spent in one area, and there’s so little you can do about it! But is that really true? IT expenses may not be as fixed as you think. Take a look at these target areas to see where you might reduce costs.
Your business likely pays to license software such as Microsoft Office 365 or Adobe Photoshop. Reviewing these software agreements, you can often find cost savings:
- You may be able to renegotiate a subscription if the provider wants to move you onto to a new offering.
- You may find that you are paying for software that your employees are no longer using much or at all. Or perhaps an employee has left and you're still paying for their licenses.
- Perhaps the pricing has changed, and there are now better plans or options available.
- There may be an open-source software alternative to save acquisition and maintenance costs. This is especially helpful with software that is seldom used in your business (but not advisable for commonly used applications).
Your current hardware may be underused, need refreshing, or have lost productivity. Look for opportunities to run applications on less expensive devices, or link together several computers to replace expensive server equipment. Standardizing platforms can also significantly reduce IT costs while providing consistency.
On the flip side, computers and systems that are old and slow can cost you just as much money. Older hardware is less efficient both in the amount of power they consume as well as the amount of employee time they waste (remember, time is money). If your systems are holding up productivity, it may be worthwhile to invest in upgraded equipment which will pay for itself in a short amount of time.
One way to cut IT infrastructure costs is to move to the cloud. You may be able to run software on the cloud for a fraction of the cost. Moving data backup to the cloud to replace an on-premises server can also cut costs, not to mention the utility savings from not having to power the replaced components.
Even if you’re already in the cloud, you can explore whether you are on the best available plan for you and consider:
- Are you paying for more storage or resources than you need?
- Are you taking full advantage of mobility and scalability features?
- Are you duplicating on-premise and cloud-based services?
At the same time, the cloud isn't always cheaper than a on-premise setup. You may find some hidden cost savings by pulling things out of the cloud and going back to an on-prem solution.
Employees need to be online so you’re not going to cut internet services. However, you may be able to control costs:
- Should you buy modems or routers instead of renting them from your provider?
- Consider the internet speed in your plan. Do you need that level of service?
- Is slow internet speed costing your company money when, in fact, you’ll be more efficient with an upgrade?
- Are you able to bundle services to find cost savings?
- Are you in a position to renegotiate your plan?
IT Staff and Services
Avoid infrastructure costs and the hiring expenses of onsite IT staff by outsourcing. Often your business can pay a set monthly fee or go on a pay-per-use model to gain services such as:
- IT help desk support
- Disaster recovery
Don’t overlook the costs involved in powering your IT components. Review your utility bills to identify trends. Can you save money by turning off equipment? Is there a better plan available with a competing service? Should you renegotiate the terms of your existing plan?
Most commonly, the main bill you'll be looking at is electricity as that's what powers all of these devices. Keep in mind however that the devices themselves aren't the only thing affecting your bill. Computers generate heat which means things like air conditioners have to work harder to keep the room where they're placed cool. Placing systems that don't absolutely need to be in the main office area in a closet or separate room can help reduce this cooling bill as you're not trying to fight the extra heat these systems generate.
Use a Technology Audit to tackle all these issues at once
Ultimately, the best way to identify specific areas to cut your IT budget is with a Technology Audit. Such an audit will allow you to paint the bigger picture and help formulate a roadmap that you can stick to. IT needs are always changing, and technology evolves, too. Many businesses add expensive components or systems with “room to grow.” New tools get added on as needs arise. Your use of certain technologies may expand or shrink. With this comes the fact that it's easy to miss things that begin eating away at your budget and costing you more money than it should.
There are several ways to perform an audit. You can do so yourself or hire an IT expert to help. It may seem counter-intuitive at first to pay money in an attempt to save money. However, an outsider’s perspective can provide fresh insight into the “way things have always been done” and help you see new opportunities for consolidation.
In either case, it's helpful to perform a Technology audit every year or two to ensure you are maximizing your benefits while minimizing costs.