20 Nov 5 Ways to Reduce IT Spending
The business world is in the midst of another rapid technological change and ferocious competition. Companies are managing their capital and operating budgets with a keen eye on operations and the future. Department budgets are being scrutinized in an effort to free up capital needed to remain competitive. In no area is this mandate more prevalent than spending on information technology.
Technology spending is among the largest and fastest-growing cost centers for successful companies, but senior executives view IT as a critical factor for business expansion. This is why technology budgets and expenses are managed closely by successful companies. Organizations that ensure their everyday IT spending is efficient and their new technology investments support the highest-impact projects, are often ahead of their competition. Below are some innovative strategies to reduce IT spending in your organization:
- Review all contracts. Contract reviews should happen annually whether or not the contract term is up. It’s a changing business world with new technologies, like cloud, changing the way we deliver technology. You need to have a healthy relationship with your vendors in the event that you need to renegotiate. The quickest and biggest impact made after a close is in the contract review. Many contracts are for services and software that may no longer be a necessity, but are still being paid. Many contracts also may have outdated pricing models. Do not be held to a term, speak with your representative and explain how your business changes; it is surprising how willing they will be to keep you happy.
- Telecommunications There are many strategies you can implement to cut costs in telecommunications. Don’t waste time looking for new vendors for local service; to switch to a new provider will cost money and staying with the local provider will save you pennies on the dollar. You can save money on long distance, disconnecting unused circuits, numbers and services – ask you local provider what they recommend for doing so. In addition, many companies continue to be billed on contracted rates, discuss the options available for changing your rates. Renegotiating your bandwidth contract is another potential cost-savings option. Bandwidth is getting cheaper and cheaper over time. In addition Tier 1 providers are pulling more and more fiber every day. Switching to a fiber backbone over traditional bonded T1 lines can reduce cost and increase speed. Many carriers are investing in cabling business parks and office buildings which enable the tenants to take advantage of their investment and obtain rates for much less than traditional technologies (T1, DS3, etc.).
- Bring your own device (BYOD). Many companies contract with Tier 1 providers like Sprint, Verizon and AT&T for cellular service. In the process, they are forcing their employees to carry phones they may not like. Letting employees bring their own devices and splitting the costs, make employees happy, company costs are lower and eliminates the need to pay someone to manage contracts, which is extremely time-consuming.
- Project analysis. IT project schedules set up by companies in previous years, maximize capitalize budgets. Consider what initiatives may be top of mind to reduce IT spending.
- Technical leadership. Sometimes in order to save money, you must spend money. Stop asking your IT Director to make tough decisions and lay out a strategy that a Senior Technology Executive or consultant should be doing. Senior IT Executives bring a tremendous amount of experience in getting the most out of a technology budget and aligning the department with the business goals of the organization. If you’re department head is still performing router or server administration, he is not the right person to make these decisions and you will have a harder time managing IT spending.
If you are interested in IT strategy planning and budgeting, we can help you. Contact us to set up an appointment with a highly qualified engineer that will help you reduce IT spending.