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IT cost reduction strategy example for procurement and operations

|  4 mins read

IT cost reduction strategy

For many businesses, the costs of maintaining and upgrading IT infrastructure is a significant percentage of their entire operational budget. That makes identifying cost reduction opportunities a crucial way of ensuring funding is saved for tasks where they are truly needed – and for getting ahead of competitors.
In this guide, we’ll lead you through how to reduce IT costs with the right IT cost reduction strategy. While the methods of analysing and then optimising your IT infrastructure will differ, the cost savings are always a positive outcome!

What are the best strategies to reduce IT costs?

When weighing up IT cost optimisation strategies, there are a few ways that you can categorise your IT operations to simplify how you assess potential cost reduction opportunities.

Audit software and hardware

Technology assets, physical and digital, are the skeleton of your IT infrastructure. However, IT teams rarely have the time to step back from day-to-day processes to see if their computing systems and software packages are actually fit for purpose. As your business scales, your IT infrastructure should move with it. However, many businesses retain software licenses long after they are no longer needed.

A thorough software audit can help organisations establish what technologies are ignored or under-used. With this knowledge, IT teams can jettison deadweight from operations for better cost savings.

Assess staff functions

Businesses should know how every employee is contributing to their overall IT function. They should also be aware of any knowledge gaps that could be addressed in operations and be prepared to take action with new hires or outsourcing. Taking on new staff may seem counterproductive to cost savings, but the long-term expense of leaving opportunities for improvement unfulfilled can be more costly.
Conversely, optimising your IT functions doesn’t have to mean downsizing – many of your IT technicians can be retrained or reassigned to other projects that provide greater valuer to your organisation.

Get quotes from new vendors

The long-established relationships that companies build with external vendors, particularly IT support teams, can be invaluable to companies scaling with the right kind of IT infrastructure. However, these partnerships can also become a financial burden. This is because contracts are often not revisited as a business’ needs change and IT teams will rarely know the going rate for other vendors in the market.
While switching from a long-term IT services provider to new software experts won’t necessarily equate to cost savings, any cost reduction strategy should include market research on the types of services IT support teams offer and how much they charge.

Four benefits of IT cost optimisation strategies for Operations and Procurement:

Taking IT cost reduction opportunities offers companies numerous benefits outside of pure cost savings:

  • More efficient IT infrastructure
    An IT cost reduction strategy will rarely be to the detriment of operational functionality – IT is that key to business operations in every industry. But in upgrading outdated computing systems, and removing under-used software licenses, business leaders can make their in-house IT function more streamlined. This can lead to higher productivity.
  • Simpler operation of IT infrastructure
    Because IT cost reduction often means removing under-used software or finding cost-effective replacements for third-party software, it can become much simpler and quicker to undertake day-to-day IT processes. This reduces the chance of administrative errors and can even increase an organisation’s software security capabilities.
  • Happier, more focused staff
    Once you have stripped away superfluous operating systems and processes from your IT infrastructure, employees will be able to see a through-way to how your IT team contributes to overall enterprise goals. This will remove any mindset around “we’ve always done it this way” and will encourage staff to think more actively about the importance of their roles.
  • Easier IT training
    The implementation of IT cost optimisation strategies are often occasions for staff re-training. However, more streamlined IT infrastructure can also translate to quicker and easier training of new staff. Removing unnecessary tools, especially proprietary technologies, can make the bedding-in process more familiar and therefore more effective.

    Spend to save: Costs savings through software experts

    Cost savings isn’t just about getting money back into your operational budget. It’s about reducing waste in all forms within your IT infrastructure and processes. Sometimes it takes an outsider’s perspective to see how operations may be missing key elements that can increase the chances of success and growth.

    You can conduct this thorough IT hardware and software audit in-house, and this is particularly effective when analysing technologies designed and built by your own IT teams. However, you may not have the industry experience to know how these proprietary platforms fit in with third-party software for more holistic IT infrastructure.

    External consultants can provide that expert eye to help identify areas of waste within your IT infrastructure and find solutions. From assessing the performance of individual software packages to checking technology functionality against a business’ overall needs, consultants have the expertise to support cost savings without compromising the productivity of existing operations.

The takeaways about an IT cost reduction strategy

# While no one cost reduction strategy will work for every business, identifying cost reduction opportunities, categorising software and aligning IT infrastructure with enterprise goals are key.

# There are many benefits to reducing IT costs, including a higher budget for other activities and more efficient IT operations, which can in turn lead to lower costs across the rest of the business.

# You have to investment in your IT cost reduction strategy. Expert software consultants can help find common issues in your technologies and processes to apply industry best practices.
Saving on excessive expenses within your IT operations is a common goal for organisations of all sizes. Origina can help you to devise a cost reduction strategy that works for you. See more about how the team’s software experts can help you with costs savings today!

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