Gartner has forecast that in 2023, worldwide IT spending will reach $4.3 trillion, an increase of 4.3% over 2022’s outlay. But in a pressing economic climate, business CFOs and procurement managers need to be doing everything they can to shrink spending and keep within prescribed IT budgets.
However, for the past several decades, the prevailing message has been that business is going more digital — so how could you possibly trim your IT spending now?
Thankfully, there is a set of strategies that organisations can deploy to keep costs down and gain a competitive advantage. Here are five ways to reduce your business’ IT costs.
Here are five ways to reduce your business’ IT costs.
1. Negotiate reduced fees on software contracts
Statista reports that the average organisation now deploys 130 software tools to assist with work tasks. So, it shows that one of the most effective ways to reduce IT costs is to revisit the contracts in your stack and negotiate better deals — as well as put strategies in place for all future deal negotiations.
As technology evolves, more vital tools, updates and features will come to market that your procurement team will need to keep abreast of — but that doesn’t mean that your software spend has to continue to increase at its current rate.
Instead, software management company Vertice explains that “even if the SaaS product you’re interested in lists a standard price on their website, this amount is subject to change” — and you may be able to negotiate on contract terms such as:
- Auto-renewal clauses
- Price protection in uplifts
- Support and maintenance
- Length of term
These discussions can help you reduce your overall contract spending without compromising on access to the tools you need the most.
2. Embrace process automation
Another way to cut your IT costs is to invest in process automation. This refers to the use of technology to automate complex business tasks. According to global data leader TIBCO, it typically comprises three functions:
- Automating processes
- Centralising information
- Reducing the requirement for input from people
When you automate repetitive manual tasks and workflows, you can save on the manpower and time that would typically be spent on them by staff during the working day.
For instance, software tools can streamline various IT processes such as system updates, data backups and security monitoring so that your IT personnel can redirect their efforts to more pressing or high-value priorities.
Additionally, automation reduces the risk of human errors, which could lead to costly downtime or security breaches. All in all, investing in automation can reduce your expenses in the long run, despite any upfront costs that might initially be incurred.
3. Outsource IT staff and services
On the subject of IT personnel, there are also strategies to reduce your reliance on in-house staff or services, which often constitute some of the largest expenses in IT.
Instead of maintaining a larger internal IT department, consider partnering with an IT-managed service provider (MSP).
Leveraging external providers allows your business to enjoy the benefits of comprehensive digital infrastructure and support without as many of the associated costs.
For example, you can reduce overheads related to salaries, benefits and training. It also allows your remaining staff to focus on business growth activities rather than time-consuming IT maintenance.
Drawing on service providers for IT support can also help you to cut hiring costs. In a review of MSP benefits, IT support firm Clear Thinking Solutions explains that “even small organisations can access highly qualified personnel without doing the hard work of recruiting them”.
Given the current state of the global tech skills shortage, hiring new IT staff can quickly grow expensive — but by using an MSP, you can access support when you need it — and pay for it only then too.
4. Implement a BYOD policy
If you’re unfamiliar with the acronym, BYOD refers to a “Bring Your Own Device” policy. IBM describes this new-age workplace setup as a scheme for employees to “use their own laptops, smartphones and other personal devices on the company network to access corporate data and perform their job duties”.
Naturally, this will replace any previous provisioning you might have been doing for workplace laptops, PCs and mobile devices — and it will save you the outlay on hardware.
The BYOD approach has seen a large uptick in popularity since the widespread adoption of remote working schedules, helping staff members to standardise their working habits whether they’re in the office or at home.
But while implementing BYOD could reduce how much you spend on hardware buying and maintenance, it’s essential to establish clear guidelines for using personal devices to access sensitive company data.
You may want to consider investing in mobile device management solutions to mitigate the risk of costly data breaches, which are growing in prevalence, according to a cloud security report from Thales.
5. Switch to cloud systems
Beyond just employee devices, your business’ server and data storage hardware could also be driving up IT costs. And as developments such as the global chip shortage and Broadcom’s deal to acquire VMware take effect, computing hardware is only set to become more expensive for UK businesses.
One way to reduce your reliance on pricey hardware is to move your IT infrastructure to the cloud. According to Microsoft, the migration of applications, data, and even entire server environments to cloud systems offers businesses plenty of benefits, including:
- Flexibility and scalability to only pay for the cloud resources used
- Compliance systems to ensure data protection standards
- Simplified management and monitoring of data
- Backup, recovery and failover capabilities
Ultimately, deploying solutions to reduce your IT costs are rarely quick fixes, but long-term investments that can yield substantial savings.
By following these strategies, you can achieve cost-effectiveness in your IT efforts, maintain profitability, and re-invest the saved capital in your future growth as a business.