IT costs are ever growing, while also becoming significantly more complex as the transition to the digital age, becomes more and more prevalent. Most organisations have replanned and reorganised their budget to find ways for savings, after their IT costs have significantly skyrocketed.
To conduct a thorough cost reduction, it is crucial to identify any sources that are not utilised to their fullest potential or have low business value and accordingly eliminate them.
Using the following tips can enable an organisation to significantly reduce their IT budget, allowing them to invest into alternative forms of technology and focus on business growth.
It is advisable to closely track the expenditures made on your IT infrastructure and identifying any major areas that are driving the variation. Compare your fixed and variable costs, to understand the major sports where the bulk of your expenditure is going and look for alternatives for the same.
Identify the cost of your top applications and look for regions where certain applications are unable to provide high business value as compared to their operating costs. Once you have found the low serving applications start reducing investment in these applications and focus more on the revenue generating ones.
3. External Labour.
Compare the monthly cost of the team that takes care of your IT infrastructure and find out ways to reallocate these resources to help further your business plans. Try to shift this labour to more low cost, activities, and focus on hiring full time employees, instead of contracted staff.
Revisit your contracts with your specific vendors, by re evaluating the business services they support.
Have a consolidated vendor portfolio that allows you to track accountability. Identify vendors that are providing the same business capabilities that you could potentially do without.
With the large multitude of projects that would be typically undergone by the organisation, it would be ideal to identify the ones that can be restructured to reduce your costs, allowing you to reallocate your resources. If possible, look for projects that can be suspended entirely for the time being, and focus on the ones that are more conducive towards revenue generation.
6. Business Units
Start aligning IT projects and investments to business initiatives, so that you can see a reduction in IT costs in alignment with a reduction in business. You can also benchmark your expenditure per employee across business units that will allow you to identify any cost outliers.
7. The Cloud
Depending on your providers, thoroughly inspect your public cloud costs. You can do this by looking at certain trends in service types like computer storage networks and many more. This will enable you to identify any anomalies, allowing you to avoid any billing surprises.
While you can look all at all the small components, it is also important to look at your IT infrastructure as a whole, including your storage and data centre assets. You must track the infrastructure cost for supporting specific applications, so that you can find specific assets that are underutilised and accordingly eliminate them.