How to manage your IT budget in tougher times (checklist)
After years of economic tailwind, many companies have become accustomed to a much larger IT suit than they really need. Now that the economy is starting to turn downwards, it's high time to review your IT costs.
Start with a survey of IT usage and costs. Then estimate your future needs. The difference reveals where there is potential for savings, how big they are, and how to realise them.
Here's my checklist of things you need to look at.
Licensing accounts for a large part of a company's costs, yet we meet many who have not taken into account the fact that different user groups have different needs.
I usually recommend companies to categorize their users into groups according to their needs and validate the need for the licenses that are actually used. Some users may have an Adobe license they don't need, or get by with a smaller version of the license they have. In many cases, they can do their work without it. Look at both user-specific and core licenses.
It is difficult to scale down licenses with an on-prem environment with your own servers. If you use cloud services, it's much easier. In Microsoft 365, for example, a number of users may have E3 licenses that would actually be fine with business premium. For mobile and field staff, F licences (F is for front line worker).
It is also not uncommon for user licences belonging to employees who have left to remain in place and cost money.
Get quotes from other operators and compare. It is often possible to get better prices and conditions by taking a collective approach when a contract for the company's total usage is at stake, rather than when each department or employee takes out their own subscriptions.
Many companies' data storage tends to swell over time. Review your retention policy to cut down on unnecessary storage costs. It should be possible to set up the system so that, for example, 5 year old data is automatically deleted, or moved to an archive where it is cheaper to keep it.
If you're investing in new servers and have an on-prem solution, consider a cloud solution that makes it easy to measure real demand and scale up gradually accordingly to avoid costly overcapacity.
Review what is good to keep in-house and what is cheaper to buy in. Should downsizing be necessary, the advice is usually to do what is required at once. Avoid repetitive actions over time as they can create uncertainty and affect the productivity of the business.
Categorise your IT investments and prioritise those that will deliver savings. Question them: is it the right technology, the right resources, do we have good licensing terms in the contracts?
A local on-prem-solution carries a real risk of high costs, both if something goes wrong and if the company falls behind technologically, losing productivity and competitiveness. Choosing cloud services and off-the-shelf solutions is one way to insure against this.
Scaling down cloud services also has a direct impact on cash flow and the bottom line, unlike cutting back on on-premises licenses or proprietary hardware. If your business is small or medium-sized, it's often much easier to move to the cloud.
Use computers and mobile phones for longer - in many cases they last five years and don't need replacing after three. And try optimising or reinstalling them before replacing them.
Review all your contracts and suppliers, not least the licensing agreements. Note when they expire and when it's time to start renegotiating or terminating them. Is price, delivery or something else a reason to get a quote from others? If, in these times of inflation, the supplier wants to raise prices, ask them to explain in detail and justify the price offer.
Ask the simple question "are we working effectively?" If you have Microsoft 365, be sure to leverage the platform and its capabilities to make work more efficient. Tools like Viva Goals can improve your company's workflows. Many tasks can be automated using Power Apps. Take advantage of the tools you already have and embrace the hybrid approach.
Microsoft 365 has what you need
Few companies have a complete picture of their IT, so visibility can be your competitive advantage. Microsoft 365 has dashboards that give you quick insight into which licenses and devices exist, their costs, and which ones are being used. An excellent basis for a mapping exercise that helps you prioritise actions that will have the greatest impact on costs.
Want to know more about how your company can make its IT more efficient?
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