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Business IT Expenditures: Where to Spend and Where to Cut

IT spending is always a major concern for businesses operating in competitive markets, but particularly so for small and medium-sized organizations. While it’s often easy to identify the need for cuts, however, deciding where and how to trim an IT budget can be a hugely complex process.

With expert help and some detailed analysis, identifying potential savings can grow the bottom line and streamline internal processes. But a word of caution: cutting in the wrong areas can have the opposite effect.

To help you with these tough decisions, here are a few tips that should help you to minimize business IT spending without adversely affecting customer service or your organization’s operations.

Constantly Negotiate Prices and Contracts

It doesn’t matter how small your business is, if it has IT requirements, there is usually scope for securing discounts and price reductions on essential purchases and contracts. For example, by leveraging your ability to shop around for the best deal, you might be able to secure a cheaper broadband deal. Whether you’re looking at the cost of cloud-based storage or software subscriptions, there is often room for negotiation.

Calendarize all of your contract end-dates, and make sure you look to renegotiate every time. Everything from the price of printer ink to data security subscriptions can be negotiated if you’re organized and determined.

Keep Track of Changing Technologies and Trends

The nature of IT means there is always a new and more efficient way of doing things just around the corner. Evaluate your infrastructure and processes regularly to determine whether or not you’re utilizing the most cost-efficient technologies available to you.

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Related: The Evolution of Cloud Computing

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For example, switching to a VoIP phone system might drastically reduce your telephony costs. Switching to mobile telephony solutions might be the way to go. Perform an annual audit of your technologies and processes, and ask yourself whether or not there is a cheaper, more efficient alternative.

Virtualize Servers

It wasn’t all that long ago that each major business IT application had its own, dedicated server.

As a result, server utilization rates were high, and hardware costs (as well as maintenance costs) were unnecessarily bloated. Now, however, there’s no need to be so wasteful. If you are still using dedicated servers, consider partitioning them so several applications can share resources.

Embrace the Cloud

More and more small businesses are switching to cloud-based applications and storage options in order to save money. If you’re hosting your own software, you’re likely to face significant capital outlay on hardware every time you upgrade or introduce new processes. But by utilizing cloud-based servers and open source software applications, you don’t need to worry about such large, one-off purchases. In addition, you can save money on administration, security and maintenance.

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Related: Transform Your Work Environment with the Cloud

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Outsource What You Can

Outsourcing IT when you’re trying to cut costs might seem a little counterintuitive, but it’s usually far cheaper than hiring new employees and continually training them. With the right outsourcing provider, you can leave issues such as data security, maintenance and repairs in the hands of the professional. Rather than being hit with unexpected bills, you pay a monthly or annual charge — allowing you to budget with a degree of certainty.

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Related: How Businesses Can Save Time with IT

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Cut Things to the Bone

Take the time to audit your IT infrastructure thoroughly. Ask yourself questions like:

  • Are there systems or purchases that just aren’t necessary?
  • Can switching from inkjet to laser printing save you money in the long run?
  • Instead of buying laptops for employees, can you provide cloud services that they can access on their own devices?
  • Can you switch to a cheaper printer paper?

Even the smallest of cuts or changes to your IT spending can add up to something significant over the course of a financial year.

Consolidate Software Solutions

A lot of small and medium-sized companies grow at a rate the incumbent IT infrastructure can’t cope with. In many cases, individuals turn to their own software and hardware solutions in order to carry out their duties. This can lead to a situation whereby several software solutions are being employed to do the same job.

Can you find efficiencies by ditching several cloud storage solutions for just one? Rather than manually merging data from several software platforms that are working independently from one another, switch to one and implement it throughout your business.

Don’t Cut Too Deeply

In most businesses, there are areas of IT spending that should be ring-fenced from major spending cuts. For example, you’ll always need security systems such as antivirus software, firewalls and data recovery. Don’t take any risks with these areas of IT. The costs associated with not having them in place can be ruinous.

Internet bandwidth is another area that you should protect from significant cost-cutting measures. The quality of your broadband connection, and its ability to host all of your IT functions, is crucial to the overall success of your business. Other areas to protect should include training and specialist staffing. However, you may be able to reduce the cost of both by outsourcing your IT requirements.

Get IT Spending Help from the Professionals

Deciding which areas of your IT infrastructure can be cut to save costs can be a minefield. Get things wrong, and it could cause serious harm to your business, and your working relationships. But by consulting with an IT spending and support specialist such as EaseTech, you can be sure you’re getting your budget perfect for your business.