Worldwide IT spending reached almost $4 trillion in 2019. You can bet that not every dollar in the bunch was put to its most effective use.
Companies are constantly on the lookout for IT cost reduction and optimization strategies as they try to take advantage of all the new innovative solutions as efficiently as possible.
Here are 7 strategies you can use to bring costs down and make sure you are getting the most out of the budget you do spend.
IT Cost Reduction Strategies
1. Use Technology Expense Optimization Software
Technology expense management software allows you to automate what is traditionally a time-consuming, error-prone process.
A technology expense optimization system allows you to gather all of your technology expenses into a single space for easy comprehension and control. By clarifying your costs and billing, it can help you discover inefficiencies and billing problems, as well as fix them.
TEO solutions can help you find alternative suppliers for your software products that provide the same tools at more competitive prices. It can also help you track which of your licensed software products are providing enough value to justify the license, and which ones you can safely eliminate.
2. Comparison Shop
The technology landscape is vast and confusing. There are multiple vendors for every conceivable business need. How do you know that you’re getting the best solution for your organization at the lowest price?
One way is to choose a technology expense platform that provides direct pricing visibility into dozens of technology suppliers and other organizations. This allows you to find the best technology available at the most competitive rates and on the most attractive terms.
This insight puts you in the driver’s seat when it comes to negotiations.
3. Get Professional Technology Contract Negotiation Support
Speaking of contract negotiations, is that something that you want your IT team focused on getting really good at? Probably not, but unless your negotiations are handled expertly, you are almost certainly paying more for technology than you should be.
An alternative is partnering with a professional contract negotiation service provider. They know the ins and outs of how technology is priced, what others are paying, and what business terms are most favorable. Using a service takes the pressure of negotiations off your team and lets them focus on innovating for your organization.
The great news is that you can find partners that will charge you only when you save money.
4. Make Sure Your Network Infrastructure is Up To Date
While it might require some initial investment, updating your infrastructure can save you a fortune over the long run. You might even find some areas of immediate cost savings. For example, if you are still using analog telephone lines to support devices like fax machines, alarms, paging systems and the like, you are probably overpaying.
Because these old “POTS” solutions are being phased out by the carriers, some have hiked prices up by as many as 5x. Moving to modern 4G LTE systems will save you money and provide additional features like wireless capabilities and remote system monitoring.
5. Improve Your Process for Evaluating IT Spend
We recommend managing all technology purchases as a full-blown project. There should be a clear charter that explains the purpose of the investment, identifies the stakeholders, sets goals, and outlines a timeline. A description of the current situation and the desired outcome of the new solution should be detailed as well as the adoption plan.
But don’t stop there. After the implementation, set up regular intervals to check-in and make sure that the solution is being used as intended. This will ensure that you don’t have any technology that is just costing money while not providing value.
6. Consider Managed Services When Possible
There are likely IT functions that are central to what you do as a business that absolutely should be managed in house. However, there are many other technologies that go into running an organization that can be more effectively and efficiently managed by a services firm.
For example, if you, like many other organizations are moving from a traditional WAN to a software-defined WAN solution, why take that burden on yourself? With a managed SD-WAN service provider, you get all of the expertise and none of the headaches.
Data-center co-location, SIP trunking, UCaaS, and contact center technologies are all excellent targets for managed services.
Hopefully, these suggestions have given you food for thought about how you might get more out of your IT spend or reduce your overall budget. If you’d like to learn more about any of them, we’d love to chat.