IT Cost Reduction: 5 Effective Ways to Slash Your Budget

Do you love over-spending your money? Exceeding your budget every month?

Is your business budget being eaten up by spiraling IT costs that you just can’t seem to get a handle on? You’re not alone. Global businesses spent over $3,8 trillion on IT infrastructure in 2019.

As a general rule-of-thumb, small-medium businesses should not be spending more than 6% of their revenue on IT. So if you’re looking for IT cost reduction tips, find them in this blog.

Practical Tips to Help With Your IT Cost Reduction

One of the best ways to implement an IT cost reduction strategy is by publishing a metric your employees can understand each month. This is a way of celebrating cost-cutting initiatives by physically showing and celebrating the savings you have made each month.

Here are some tips to help you achieve these cost-cutting wins:

1. Carefully Assess Your Contractor Needs

Many business owners may be under the impression that they’re saving money by hiring contract workers, rather than hiring full-time employees. But this is not always the case as these costs can quickly spiral out-of-control. Especially if you’re aren’t keeping close tabs on outsourced IT work.

So, do a thorough assessment of the current state of outsourced work and how much flexibility you have when cutting these costs. Publish an account of the number of freelance workers you have and assess who is really important.

Take note of the amount of overtime your contractors work and what their rates are. This is generally quite a high expense, so it may be worth implementing a limited over-time rule where possible.

2. Make the Most of Cloud Technologies

Cloud technology has completely revolutionized data storage and the function of software services today. Now is the time to make the most of this technology.

There’s no need to run and maintain an elaborate IT infrastructure yourself. Rather, outsource this to a cloud service provider who can tackle this all for you. Cloud storage is not only efficient but reliable and cost-effective in the long-run.

Leave your accounting, web hosting, and IT infrastructure maintenance in the hands of a cloud-based service for an affordable monthly rate.

3. Decommission Software Licenses Where Possible

It’s no secret that software licensing costs businesses an absolute fortune. Take some time to go through the software licensing of your business and trim the fat where possible.

Software agreements are usually re-negotiated over time. This means that their new costs provide the perfect opportunity to move away from certain software altogether.

Take a look at expensive software that is being used for small functions, too. Is it really necessary and can you move to another cost-effective solution instead? Check out this netsuite pricing guide for more.

4. Opt For More Cost-Effective Hardware

Where there is an opportunity to run your applications on cheaper devices, your business should implement this.

In short, try to downscale your server hardware by linking up powerful PCs. This tends to work just as well as mid-range servers and can drastically cut your hardware overheads.

5. Go Green in Your IT Office

A great way to scale back on costs that add up on a daily basis is by implementing a ”greener” office environment. Start by scrapping the use of paper — make use of Google docs and other sharing apps and platforms. Try to reduce the need for stationary in general by digitizing your workflow.

Don’t just throw out old electronics, donate them to charity or a nearby school. By improving your carbon footprint you are also saving money through tax write-offs.

Find Business and IT Advice at Your Fingertips

We hope this blog on IT cost reduction has left you with some inspiration to turn your finances around.

If you’re looking for further business advice, we offer topics on accounting, cybersecurity, marketing, branding, and more. Explore this website and brush up on your business knowledge today.