Five Ways to Save on Your Company’s IT Costs
By Eric Edwards | September 27, 2022
It’s that time again. Time for crisp, cool breezes and warm, yummy beverages. Tree foliage changes fashion into yellow, orange, and splashes of red. Baseball playoffs pop up on television, and football tailgating becomes a rite of passage. And, it’s also that time when once rational marketers decide everything should be pumpkin spiced.
It’s Fall, ya’ll!
This time of year is also when most companies focus on next year’s operating budget. Leaders of IT departments (CIOs, IT Directors, and IT Managers) everywhere will review last year’s budget and formulate their thoughts on what IT spending will be for the next fiscal year. Should we upgrade, repair, or buy new? Do we invest in Platform A or Platform B? Can I convince my CEO to replace our receptionist, Beth, with an android named Aiko?
Wow. That’s a whole lot of tech to consider.
How to Save on IT Costs
As you chug another pumpkin spiced-whatever and stare at your budget spreadsheet, here are five steps you can take to cut down your IT spending, impress your CEO, and make your argument to get an Aiko.
1. Find out what’s changed with the corporate direction
Information technology costs begin with corporate strategy and where the business wants to head. But, as we all know, things can change quickly. For example, the corporate strategy made in the Fall of 2019 went out the window by the following March as the world shut down due to COVID.
Raise your hand if you had stock in Zoom before 2019. Come on, be honest. If you did, you’re reading this blog from an exotic beach, sipping a pina colada.
Virtual meetings are the norm now with applications like Zoom, Microsoft Teams, and Google Hangouts. According to Datanyze, almost 100 web conferencing technologies are in existence, but Zoom has the largest market share by far, at 74.78% and Cisco Webex is second at 8%.
Of course, not all corporate strategy shifts are on the scale of a global pandemic. Most company directional changes occur when new markets present themselves, executives decide something, or a key employee departs the company unexpectedly. When those things happen, do you adjust your IT plan to accommodate such an occurrence? You should. You may need to spend more or less IT money to achieve the company’s year-end goals. You want to avoid your CEO saying in the fourth quarter, “why didn’t I know about this sooner?”
Companies are constantly adjusting projections, even in small ways, so your IT plan needs to accurately reflect these changes to avoid potentially abrupt (and expensive) technology costs. A best practice is to set aside time at least once a quarter to thoroughly review your budget to see what you’ve spent and if you remain aligned with your company’s overall strategy. If not, ADJUST!
2. Take inventory of your IT
To effectively reduce your future IT expenditures, you need to know what you have on hand today. Unfortunately, IT inventory management gets more complex each passing year. Aside from staffing, it’s a lot for an IT department to stay on top of knowing what’s in the cloud, what hardware the company owns, which employee has what specific device, who needs what security permission, and when specific software licenses will renew.
The list can go on and on… but you do need a list!
IT inventory lists should account for not only individual items but also how old they are. For example, some companies do not keep track of mice, and keyboards (too inexpensive and throw-away) but will note monitors, headsets, mobile devices, laptops, servers, Wi-Fi routers, etc. Most companies cycle through and purchase new equipment every three to five years.
Identify must-haves & needs
Your company should have a plan to get from its current state to an “improved” state during the next three to five years. Except for the small plan changes mentioned above, your IT budget must be in lockstep with the company’s overall strategy.
First, you should review last year’s IT budget and highlight your recurring expenses. Typically, these are:
- Cloud storage space
- Renewing software licenses
- Application subscriptions
These are must-haves that you cannot do without. Software and applications may change, but the cost to buy some sort of license or subscription will probably remain.
Identify some "wants" to your budget
Be sure your IT budget also includes some “wants” in it. Much like the “needs vs. wants” in a household budget, set aside some expenditures to try new equipment or applications that may improve efficiencies for the company down the line. A market research firm, Vanson Bourne, found that 96% of IT leaders said a strategic company priority is increased spending on IT innovation. However, 71% also said they struggle to find the budget for IT innovation.
Having a “wants” list in your IT budget can also be considered as a contingency line. Your “wants” list leaves you some wiggle room in case unforeseen expenditures arise. Don’t spend (and spin) yourself into a budget corner and leave yourself without room to pivot.
3. Strategize what resources are cloud-worthy and when
As the leader of IT, you probably do not think like your CEO. They worry about financial things like market share, staff productivity, inventory, and payroll. You, on the other hand, ruminate about technical specifications, bandwidth, and if the IT staff fridge should be stocked with Red Bull instead of Mountain Dew. Totally…different…mindset.
As we mentioned in a previous blog post, the pandemic caused many companies to jump into the cloud sans parachute. There are substantial IT cost savings that can be realized using cloud apps, but test how the apps interact with your network and any legacy systems you may have.
And do not skimp on your internet access and security. What you save from migrating to the cloud, reinvest in your connection to the cloud and your physical and digital security.
4. Review usage of specialized departmental apps
Another great way to reduce IT costs is to review the usage of specialized departmental applications. As a marketing professional, I raise my hand and plead “guilty” to this infraction.
Productivity applications are great when fully leveraged. Unfortunately, many fall short due to users’ lack of understanding and training. New apps hit the marketplace daily, and marketers especially like shiny, new toys. Marketing mentality conjures thoughts of, “how does this work and how can it set our company apart?” But soon, the novelty wears off once a marketer sees something else shiny, and the “old” app gets placed into a digital desk drawer.
Collaborate with department leaders and ask questions about their app usage to see if they believe they are leveraging the full benefit of their applications. If not, inquire about what can be done by IT to assist. Cancel the subscription and further reduce IT costs if the tool didn’t meet expectations.
5. Use an IT costs savings platform to accomplish all the above
You may already be using a managed service provider or another outsourced solution related to all things IT management… and you’re probably paying a pretty penny for these services, right? Another way to reduce IT costs is promptly ditching (while trying to avoid incurring any break-up fees, of course) your costly MSP and using a free technology savings platform in it’s place.
A technology savings platform, like the one offered by Una, assists IT leaders in reducing their costs by pulling IT spend and contract information into a single dashboard. This provides greater visibility into current IT expenditures, allows for better contract management, and lets IT managers compare thousands of technology vendors and IT solutions in one place.
As a group purchasing organization, Una leverages billions in buying power to negotiate discounted prices on the products and services businesses need to operate. Within the IT space alone, Una members have access to over 3,000 vendors, all offering contracts with favorable pricing in over 16 different IT categories.
In addition to members being able to fulfill their hardware and software needs at a reduced cost, the platform also provides tracking tools to benchmark current pricing, keep on top of application licenses and subscriptions, and helps you identify potential savings opportunities before an existing contract renews.
The best part? Una members can utilize this service completely free of charge. Watch the 20-second video below to get an inside look of how the dashboard works.
Reducing IT costs and spending
As you can see, there are several things to consider when building an IT budget and some not-so-apparent ways to save your company money.
Okay, after you incorporate our five suggestions to reduce your IT spending, it’s time for you to march into the CEO’s office and make your case for Aiko to join the company. Now, if your CEO furrows their brow and looks at you like you’ve lost your mind, don’t forget to point out that Aiko is never sick, rarely needs a bathroom break, and is a blast at the company Christmas party.
Ready to start saving on IT costs? Una members have free access to a technology savings platform designed to save you money, time, and effort when it comes to IT spend management. Contact us to learn more.
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