business cost

An efficient and effective It infrastructure is crucial to the success of a company; it is also one area of the budget that is constantly under pressure to be reduced. The challenge is finding ways to contain costs without compromising the business. Here are some ways your company can pare down expense without sacrificing operations.

Flexibility Flexibility in your IT operations is crucial to keeping costs under control. You will be limited in effectively cutting costs if you are locked into rigid contracts that carry steep exit penalties, or do not allow for scaling up and down based on your needs in the current moment. Flexibility should be a key consideration when it comes to IT initiatives.

Simplification If your IT infrastructure is unnecessarily complex, you may be spending more money than you need, perhaps even up to 25 percent more per unit of IT work. While you do not want to simplify your processes to the point where you may be compromising business value, carefully examine your current set up to find ways where you can make the process more streamlined. For example, you may be currently using multiple cloud service providers to handle different workloads, but you will likely be better off using just one.

Kill Any Orphan Projects Many consultant’s report on a common phenomenon accounting for hidden IT costs when evaluating the departments of various companies—staff working on projects that may no longer be necessary.

They may have been commissioned by someone who is no longer at the company, or who is now working on another assignment. The IT department tends to keep on keeping on with a project once assigned without checking if it is still even needed.

Evaluate Software Licensing Needs Software licensing is a major IT expense, but many companies are paying much more than they need. One survey found that in mid-to-large size companies, anywhere from 25 to 75 percent of licenses went unused. This can translate to thousands of wasted dollars, or even millions for larger companies. Do a license review to see where you stand right now, and use that information to negotiate contracts and prevent unnecessary renewals.

Look into open source alternatives to costly proprietary software. Cut Back on Virtualized Server Sprawl Virtual servers can translate to big cost savings for a company, but waste can be prevalent, even in virtual environments. Server virtualization is a particularly common use for cloud services, and many companies may be spending money unnecessarily. IT department should be evaluating what servers need to be reallocated or decommissioned, for example. Without this examination, your company may not be reaping the cost-savings typically associated with virtualization.

Be Disciplined If you really want to contain IT costs for your company, cost-cutting efforts should not be viewed as some one-off activity that you will not revisit again until you feel like things are getting off track again. True savings requires a disciplined effort that includes regular monitoring and setting of specific targets that will regularly be evaluated.


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