How to Cut IT Costs in a Down Economy?

Businesses in a range of industries across Connecticut are facing multiple headwinds – difficulties in acquiring the best talent, increasing costs, and markets that are suffering a bout of the jitters, to name a few.

It makes sense in circumstances like these to review costs and identify areas where savings can be made. This includes cutting the costs of IT.

For many businesses, however, IT is crucial to all aspects of operations. How can you cut IT costs to trade through this period of economic slowdown without having a negative impact on business performance? The good news is you can cut IT costs without harming business performance.

The even better news is you can cut costs and, at the same time, improve your IT infrastructure and IT management processes. Here are six areas you and your team should look at.

Move Data and Systems to the Cloud

Buying, running, and maintaining on-premises hardware and systems is expensive.

The more prudent approach is to move data and systems to the cloud, as cloud solutions eliminate or reduce the expenses you currently incur with your on-premises systems. Cloud providers also typically operate on a pay-as-you-go model, so you will only pay for what you need, reducing your costs even further.

Assess and Streamline Platforms and Applications

It is common to have a huge range of platforms and applications within an IT infrastructure. 

The number of platforms and apps can even run into the thousands. This situation happens over time as individuals, teams, and departments look for solutions to an immediate issue within their sphere of responsibility. 

How the new app or platform integrates with the rest of the organization is rarely considered in any great detail. The result is you could be paying for platforms or apps that nobody in your company is currently using. Even where people or teams are using the platform or app, they might not be using it to its full potential, bringing into question whether the organization is getting the best deal.

The solution is to identify all the platforms and apps that your company uses and/or pays for. You then need to complete an assessment to discover streamlining opportunities. Here are some examples:

1. The easiest part of this process is to cancel or get rid of any apps, platforms, or licenses that you are paying for, but which are not currently being used.
2. You might get a better deal on the licenses you need for a particular platform or application by negotiating a bulk agreement with the vendor rather than multiple individual deals.
3. There might be consolidation opportunities that allow you to cut costs. For example, your company might be paying for app A to perform one function and app B to perform another. However, you might find that app A is capable of performing both functions, allowing you to consolidate, so you only use and pay for app A.
4.  Your team might use an app or platform, but not to its full potential, i.e., they are only using some of the features or capabilities even though you are paying for them all. In this situation, you might be able to reduce your subscription level to cut costs. There might even be a free app that will do everything you need.
5. For those apps and platforms that you need to keep, it is worth going back to the vendor to negotiate the best deal possible. The ideal time to do this is when the licenses are coming up for renewal.

Assess and Streamline IT Machines and Equipment

You can complete a similar process to the above, only with the machines and equipment that are part of your IT infrastructure. 

You should start with carrying out an audit of the machines and equipment you own and/or pay for (including any equipment you rent or pay for on a subscription basis). You should then look for streamlining and cost-cutting opportunities. 

Here are some examples:

1. Sell or stop paying for any machines or equipment you don't currently use.
2. Consider implementing virtualization solutions where you can replace physical equipment with a virtual machine. For example, instead of giving an employee a PC or laptop, provide them with a virtual desktop.
3. Standardize the IT machines and equipment in your organization as much as possible. By standardizing your equipment, you might be able to negotiate a better deal with suppliers. Maintaining and repairing standardized equipment will also be less costly.

Enhance IT Automation

Increasing your use of IT automation solutions can also help you cut IT costs. 

The issue that many IT departments have in modern businesses is time, as so much of their time is spent just keeping the IT infrastructure ticking over. There isn't much time left over for working on the improvement and optimization strategies that can not only reduce IT costs, but also help to future-proof your business and enhance its competitiveness.

We can look at one area of IT in your business where automation can make a significant improvement – IT support. In many businesses, IT staff spend a lot of their time dealing with support tickets, with much of this work being highly repetitive. In other words, they answer the same question or provide the same instructions over and over again.

You can dramatically reduce the number of IT support tickets your technical team has to answer by implementing a self-service IT support solution. This could be in the form of an AI-powered chatbot, for example, that can deal with most IT support queries. Those the chatbot cannot answer then get transferred to a person.

Implement an Employee Retention Strategy

Staffing makes up a large proportion of the IT costs in many businesses. 

There might be ways to reduce the number of technical staff you employ, but the likelihood is you will continue to need skilled IT personnel to manage, support, and drive the IT infrastructure in your business forward.Good IT staff are not easy to find, and the cost of recruitment is high. 

To prevent these costs in your business, you should implement an employee retention strategy so you can retain the knowledgeable IT staff you already have.

Work With a Single IT Services Provider

Our final tip for cutting IT costs in a down economy is to streamline how you work with IT services providers, ideally consolidating down to one.

By using one IT services provider, you will be able to cut costs by negotiating the best deal. Crucially, you will also get a better standard of service, not least because a single IT services provider will be more knowledgeable about your business. 

You will also eliminate the blurred lines of responsibility that can sometimes exist when there are multiple providers involved.

Supporting Your IT and Your Business

At NSI, there isn’t much we can do about the economic and market headwinds that your business is currently navigating, but we can offer support, including helping cut your IT costs. 

We can also help prevent new IT costs from developing (such as the costs of dealing with a data breach), as well as improving the management of your IT infrastructure, further reducing IT costs over the medium and long term. Get in touch today to arrange a consultation.