Whether you’re a small business owner or a larger corporation, the costs of running a business continue to increase year-over-year, especially when it comes to IT-related products. The cost of enterprise software, for example, is projected to rise by over 8% in 2019. Over the past few years, IT expenses have increased between 3-5% annually and identifying IT cost reduction strategies is key.
To a certain degree, it’s inevitable that IT spend will continue to rise over time. Teams will adopt new software that helps them do their jobs better and with fewer people. But other increases are under your control. And saving money in certain parts of the business lets you reallocate resources to higher impact areas. IT cost savings, no matter how small, can be used to help drive the business forward and increase profits.
How to Reduce Your IT Spend
Identifying cost saving opportunities might prove easier than you think. Here are 3 key ways any business can reduce their IT costs.
- Don’t go the cheap route or opt for low-quality
Although it may seem like the easier path, selecting low-quality or cheaper products often leads to increased replacement costs. That AmazonBasics USB cable will likely conk out before an Apple one does. Instead, if you invest a little more money and select higher quality items, you’ll need to replace them less often, if at all.
- Pinpoint the items that get lost or break most often
By identifying these specific “vulnerable” items, you can seek out ways to prevent them from being lost or broken. For example, TetherTies customer, Joe, from Stanford University noticed a trend with adapters going missing on a regular basis. He notes: “we had a number of our adapters go missing; the cost to replace the missing adapters was beginning to add up.” And beyond the financial cost, the university, (and its professors, staff, and students,) found themselves at a loss for time, efficiency, and teaching opportunities.
Once they identified the problem, they were able to investigate possible solutions. Joe’s team realized that security cables from TetherTies could eliminate this issue almost entirely. Their adapters no longer went missing, which ultimately saved them money and decreased their replacement costs. They allowed everyone to use their classrooms and meetings rooms, as intended, without hunting around for replacement adapters on the fly.
- Shop around and negotiate
It’s okay to let vendors know you are shopping around. This is especially important if you’re a large purchaser, buying hundreds or thousands of items each year. Be clear that you want to identify the best product for the best price. It’s important to research ahead of time what each vendor offers and read any reviews of the product you’re looking for.
Once you’re able to obtain a quote from your vendor, shop your quote around. It behooves you to spend some extra time, reaching out to a few other vendors for comparison. Even if you have a specific vendor in mind you’d prefer working with, you can use another person’s quote as leverage. Share those competitive quotes to negotiate with your selected vendor.
How to Maintain Low IT Costs
The above steps will help uncover where IT costs can be reduced. Now, let’s take it a step further and discuss a few ways you can maintain this reduction over time.
- Share best practices across locations
If you have multiple office locations or campuses, ensure your IT managers are sharing best practices. Encourage them to document what they’re doing and how they’re saving money, so people can learn from one another. Not only will this help with consistency across the company, it will also be easier to manage costs and identify where reductions or savings are happening.
- Track your inventory and vendors
If you don’t already have one, create an inventory of everything you buy and from whom. Maintain a document with the various vendor names, products, and quotes you gather. This will allow you to easily compare offerings across vendors. It can also be used when speaking with vendors if you need to reference any past quotes.
Furthermore, this intel can be shared across office locations to avoid duplicate work. Perhaps each location of your business orders hardware and software separately. Though this may be easier in the short-term, it likely costs you money, long-term. Consider aggregating some of your purchases for greater capital efficiency.
- Embrace remote work
Though this option might not be possible for all teams, it’s one worth considering. Embracing remote work is a win-win situation for the business and employees. It reduces costs and increases employee satisfaction. IT costs are reduced because fewer people need to use the conference rooms and the equipment. Adapters are less likely to go missing or get broken with limited people in the office. This also cuts down on usage of those items; lower usage means greater durability and longevity.
Help Everyone Do Better Work
Ultimately, these best practices can help you and your team reduce costs. The money saved can be saved or spent on higher impact areas. This contributes to the overall health and efficiency of the company.
Furthermore, these strategies save employees the frustration of going without the tools they need to do good work. They ensure everyone can focus on the jobs to be done, rather than trying to hunt down equipment that the company has lost or can’t afford. These practices are an investment in employee productivity and satisfaction.