A third of businesses spend more than 5% of their annual revenue on technology. However, this is a percentage that is steadily rising each year.
To keep pushing your business forward, you often need to invest in the latest technology. In addition to this, you will need to periodically replace IT equipment, and upgrade software.
This makes it challenging to calculate your IT cost projection. You could base your technology budget on the previous year’s spend. However, this would be unwise without factoring any changes in your business’s technology needs.
Another IT funding challenge may surround your IT invoices. Bills for your IT services can be hard to follow. The major issue stems from difficulties in checking whether the services that you have been invoiced for are representative of the service you have received.
An important element of IT cost reduction involves checking these services. However, how can your accounts payable be sure that the invoices are accurate?
One way of simplifying this task is through the use of technology expense management systems. TEM allows businesses to get a better handle on their IT assets and services efficiently.
Here are the key features of a technology expense optimization platform.
What is Technology Expense Management?
Technology expense management is designed to take the stress out of auditing your IT expenses to cut your spending. By carrying out auditing tasks on all of your IT services, you will be able to take full control over your IT spending.
Technology expense optimization involves looking at what services are being used, how much usage they are receiving, and who is using them.
The right expense management platform will not only manage your IT services, but it will also optimize them by looking for potential cost savings for your business.
How does Technology Expense Management Deliver IT Cost Reduction?
Utilizing technology expense management should be a core element of your IT cost reduction strategies.
Carrying out invoice audits is a time-consuming process. If your finance team has to trawl through numerous long and complex IT service invoices, they may not ever find the anomalies that will cost your business money.
Using a technology expense optimization platform will allow automated invoices. The platform will identify these billing anomalies, meaning you can ensure you can challenge the service provider and have the invoice corrected.
Identify Unused Services
In big companies, it can be easy to lose track of your IT assets. You may have technology set up in multiple locations, and you may have countless employees using it.
Over time, the use of some of this technology may diminish. But unless someone takes the initiative to point out that a piece of equipment or an IT service is not being used, then you will continue paying for that service or item.
Using a technology expense optimization platform, you will be able to monitor the usage of all services. This allows you to review whether it is necessary to continue paying for them and cancel them if needed.
Identify Underused Services
In the same way that your technology expense optimization platform highlights unused services, it will also identify services that are receiving minimal usage.
If a service or device is underused, it is time to consider whether you are getting value for money.
If the minimal use of the service provides considerable added value, then it is worthwhile continuing to pay for it. However, if the opposite is true, then it may be time to explore other options.
Removing Human Error
When manually comparing long and complex invoices with the actual usage of the service, several issues may occur.
Human error can be problematic. When analyzing a considerable amount of data, it can become easy to misread numbers or make miscalculations. Things may also get missed quite easily. After all, your employees are only human.
Analyzing complex service usage invoices can be a challenge to your accounts team. Often, the finance department of a business will have little understanding of the services that they are checking the billing for.
Comparing the invoice with what was actually used will mean speaking with the relevant departments. This will require a lot of communication and investigation. It will be time-consuming. Even after all of the efforts, it may yield unclear results.
For full IT optimization, you will need a system that understands and analyzes information quickly.
Get a Headstart on Contract Renewals
Your technology expense management platform can track all of the renewal dates for your annual IT services. When a service is due for renewal, it can prompt your accounts team to start shopping around for the best prices from competitors.
Taking a proactive approach to obtaining competitive quotes is vital in technology optimization. By using this function of the platform, you will always be paying the lowest price for the services that you are using.
Analyze Your Technology Spending
Understanding the costs of your technology services can be difficult, especially if you need to gauge the true value of your IT spending.
Using technology expenses management, you will be able to get a clear and precise picture of what you are spending and what you are getting in return for these services. By analyzing your technology expenses, you will be able to see the most costly areas as well as the most inefficient.
You can also track your IT spending and compare it against previous periods.
Taking Back Control of Your IT Services
If your business is not already making use of technology expense optimization, then you’re missing out on the opportunity for genuine savings on your IT spending. The potential IT cost reduction is considerable, and many companies report seeing significant percentage decreases in their IT budgets after implementing the systems.
For more information about the technology expense management systems that we offer, and how they can benefit your business, get in touch today.