11 Effective Ways to Cut Your IT Costs

Cut Your IT Costs

All businesses have a strategy in place for cost reduction. One of the key areas where a company can save money is by cutting their IT costs. Technology plays a big role these days in almost every business, with costs going up every year as businesses improve and update their IT software and technology. Therefore, it makes sense one of the first areas to try and reduce cost is in technology.

Here’s what your business needs to know about cutting costs in your IT department.

1. Outsource to Other Vendors

Outsource tasks to other vendors to save costs, such as outsourcing to an accounting company for your payroll. Getting someone else to do this for you will save a lot of money over the year. Otherwise, your internal costs will include not only the software and infrastructure required for most payroll applications, but you’ll also need to hire one or more employees who know how to prepare payroll.

2. Move to Cloud Storage

Moving your business data to a cloud server is a good way to reduce costs and consolidate company data. Cloud servers are hosting sites using multiple servers to hold your business data. This frees up valuable resources on your own network servers, letting you increase the functionality of your own servers for specific software applications. Another advantage of cloud services is that you can free up employees and resources to focus on other tech initiatives.

3. Regularly Review Service Contracts

Review your current service contracts at least twice a year. Talk to other service providers and get quotes so you can compare prices. Many providers will be willing to offer substantial savings to acquire you – or keep you! – as a customer.

4. Look for Hidden Costs

Every company has hidden IT costs that – if not uncovered – can quickly put your business over budget. Take time to examine all aspects of your tech department to see where you can trim these costs. This can include everything from subscription fees to bundled licenses, which you may be able to negotiate for lower prices. If you’re unsure of how and where to save costs, consider consulting with a qualified tech support team to help you identify where cost reductions can be implemented.

5. Keep an Up To Date Inventory of Software Licenses

Many companies use a wide variety of software, each which comes with its own licensing agreement. Paying for these licenses is an expenditure you won’t be able to get away from. Do a bi-yearly inventory of all your licenses. Make sure you’re actually using all this software. Many companies find they’re still paying for software they’re no longer using.

6. Consolidate Servers

In the past, most software applications used their own dedicated servers which drove up the cost of computer networks. If you still have dedicated servers, you can partition each of them to allow for multiple software applications yet use the same hardware. You’ll save in costs due to using less resources to maintain consolidated servers.

7. Use Less Bandwidth

One technique more businesses are using to reducing network costs is using less bandwidth. While this isn’t always possible for larger businesses, smaller companies can move all or part of their network to traffic circuits that are lower cost by having some employees work remotely. Another option for less expensive bandwidth is to consolidate application infrastructure within your server.

8. Use One Supplier for Internet and Phone

One of the biggest costs to businesses of all sizes is internet and phone charges. Using a different supplier for each can significantly increase your IT budget. Most suppliers will be able to offer you savings when you bundle services with them.

9. Use Free Apps for Communication

You can lower phone costs even more by having your employees use free software apps, such as Skype or WhatsApp. These free apps reduce both long distance and cell phone charges.

10. Restructure Employees

Many IT departments have more employees than they need, with someone hired for each specific IT task. Take a look at your employees and the role they play in the company. While it makes sense to have experienced people who know what they’re doing when it comes to top end IT tasks, some of the less complex tasks can be delegated to a smaller team. As your company experiences turnover of employees, see where you can combine job descriptions rather than hiring a replacement.

Another way to cut personnel is by hiring college interns and grads. Lack of job experience means you may be able to hire them at a starting wage.

11. Reduce Employee Turnover

While it makes sense to restructure employees so you’re using your job force more effectively, it also makes sense to reduce employee turnover to save costs. The cost of hiring and training new employees can be substantial. This is particularly true if you’re losing experienced programmers and IT techs that play a significant role in your IT structure. Try to avoid turnover and retain your key employees.

In any competitive market, IT budgets are often overlooked when it comes to the operating costs of a business. Using the cost saving techniques here, you’ll be able to make smart decisions when it comes to your business IT structure.


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