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How To Reduce IT Costs

In today’s fast-evolving business landscape, reducing IT costs has become more important than ever. From hidden infrastructure expenses to rising energy and labour costs, your IT setup may be costing more than you realise. This page outlines proven IT cost reduction strategies, including optimising your current infrastructure and adopting cloud-first solutions.

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How to reduce IT costs

In Europe, businesses spend around 10% of their revenue on IT*, yet it’s becoming increasingly difficult to find and retain skilled staff to manage and maintain their current IT infrastructure. Given this significant investment, it’s crucial to ensure budgets are spent in ways that deliver the best returns, which sometimes means cutting costs in other areas.

Investing in the right IT can pave the way for increased innovation, collaboration and results. But what if all you’re doing is investing in the status quo? On-premise equipment maintenance and repair, trying to keep on top of spend with no real visibility as to where it’s going – the knock-on effects can cause real business frustration.

Where are your biggest IT costs?

While many IT costs are visible, others can be a little more hidden. Here are some of the obvious, and not-so-obvious, costs of IT:

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Infrastructure

Physical equipment requires significant investment, not just upfront, but in maintenance and repair costs, too. As equipment gets older, maintenance needs increase. On-premise infrastructure also requires space, which has its own cost implications, particularly for larger businesses operating their own data centres.

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Labour

Equipment maintenance, admin, and providing support for users can all be labour intensive. Installing printer drivers onto staff devices, for example, can be time consuming and it’s a process that has become even more problematic over recent years as more staff are working remotely.

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Energy

IT infrastructure can be a heavy consumer of energy, even more so if that kit is older. Newer equipment tends to be much more energy efficient.

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Security

Maintaining system security can become more challenging and costly as IT infrastructure ages. For example, older tech might not be compatible with the latest updates needed to prevent security breaches and cyber-attacks.

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Wastage

With older IT set-ups, there can be little visibility of, for example, print wastage as a result of printing documents with errors in or sending them to the wrong printer

A brief guide to reducing IT costs

The good news is that it is possible to lower IT costs. The key is finding a balance between cost reduction and data security. For immediate savings you might consider implementing an IT cost reduction framework. Whether you’re starting with short-term fixes or looking for long-term gains, here are some IT cost reduction ideas for you to consider:

• Rationalise your applications – get a handle on all your current business applications. Conduct an audit of what you have, what’s being used, by whom and how often.

• Technology planning and budgeting – assess exactly what and where your IT costs are. Is your tech meeting your current needs? What about future needs?

• Assess your current IT vendors – evaluate contract costs, whether it’s business critical and if it’s being used to its full potential. It might be time to renegotiate or find new suppliers.

• Consider cloud migrations – cloud-first strategies are increasingly the norm for all kinds of companies. If you haven’t already migrated some aspects of your IT to the cloud, could you? If you have, could you migrate others, for example, printing?

A cloud-first strategy is a strategy for IT cost reduction

Migrating IT infrastructure to the cloud offers the all-important cost reduction possibilities but, importantly, it also offers significant opportunity and enhancements:

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Scale up or down as your business needs change without the cost and worry of hardware

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No expensive investment in hardware

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Save on IT and licensing costs

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Access to the latest software and security measures

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Increased security – firewalls, encryption and user access control make the cloud a safe bet for businesses

FAQ

How can your company identify unnecessary IT costs?

Auditing your IT infrastructure is essential. Look for under-utilised software licences, seldom used servers or outdated hardware. Identification of these can help reduce costs without affecting operations.

How do IT process automations impact costs?

Automating repetitive IT tasks allows staff to focus on more strategic roles, which can lower labor costs and boost efficiency. Tools like AIOps can streamline operations, resulting in substantial cost savings.

Why is it important to monitor and manage software licences?

Underutilised software licences can be hidden costs. Effective cost management can be achieved by regularly reviewing and managing them to avoid unwanted renewals and reduce unnecessary expenditure.

What are the benefits of IT cost optimisation?

IT cost optimisation not only saves money but also improves efficiency. This process enables companies to reinvest in growth opportunities, maintain competitiveness, and improve overall strategic agility.

How often should IT cost evaluations be conducted?

Regular assessments are essential, ideally conducted once or twice a year. This practice ensures that your IT strategy aligns with business needs and market demands, allowing for timely adjustments and minimizing financial waste.

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