10 Creative Ways to Slice IT Costs
How can IT leaders cut costs when inflation spikes the price of everything? Here are some innovative ideas that might help with overstrained IT budgets -- without giving up the very things they need to operate.
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Inflation and looming recession scares are worldwide. IT will likely need to get creative in managing costs, at least until the severity of the economic threat is known for certain. Meanwhile, the need for more data, more digitalization, more automation, and more technology assistance in general continues to grow.
“Concerns about a global economic recession have CIOs everywhere tightening their belts. While worldwide IT spending was projected to increase another 4% to $4.4 trillion this year, CIOs are now feeling the pressure to reprioritize spending with an eye to what’s going to keep their business afloat during another period of scarcity,” says André Christ, CEO and co-founder of enterprise architecture management company, LeanIX.
Some are quick to say don’t despair. But there’s lots to despair. However, that doesn’t mean you can’t successfully maneuver in this environment.
“Managing IT costs in a time of inflation is a major challenge for today’s enterprises, but it is not impossible,” says Rishi Kulkarni, senior director and cloud native offer lead, Capgemini Americas.
But seriously, what can an overworked, underfunded, overcharged IT head actually do?
Here are some ideas on how to creatively shave or chop costs from your overstrained IT budget without giving up the very things you need to operate.
It’s no secret that cloud instances are budget killers. But these prices are going up like everything else is these days. So, this is a good place to cut costs without hurting operations.
“We continue to hear from customers that they are exceeding their cloud budgets and either don’t know why or are unable to implement the controls to manage costs. Effective CloudOps helps to mitigate this,” says Capgemini’s Kulkarni.
But what if you’ve already toggled all the commonsense controls, including run optimization, to contain cloud runaway costs? Then consider reevaluating and prioritizing projects according to business values and put low value runs on hold for now -- or manage them in other ways to push them to a much lower price point.
“Define product-centric IT and cloud budgets, including business and IT4IT products, and align all business processes, applications, infrastructure, people, and technologies to these products. This way, you can invest in the areas that enable higher business value while implementing mechanisms to control costs in other areas through automations and DevSecOps,” says Kulkarni.
Ever since Hadoop had its first taste of data ingestion, we’ve been feeding big wads of information into it and other technologies to find out what insights they’d burp back out.
Sometimes the result is some new delight like digested coffee beans from the wrong end of a civet cat. And sometimes it was less of an insight and more of a mundane, barely useful detail like “customers buy coats in winter.” Occasionally, companies hit the information goldmine but most often the experience is nothing Sherlock would retell in a mystery novel.
Nevertheless, companies mine all the data. All. The. Time.
Alas, in this economy, no company can continue mindless mining in the hopes of finding a big data score. Failed AI projects are piling up and BI seems stuck in an endless loop of nanny cam views of customer transactions.
Time to stop mining the data and to start minding the decisions. It’s called decision intelligence and if you haven’t heard of it, think of it as making a decision about what business outcome you want to achieve, and then looking for the data you need to analyze to move you toward that goal. Less waste, more muscle in those long promised “actionable insights.”
In terms of AI, decision intelligence methods will help you rethink and better strategize the business rules you’re using to govern automated decisioning. By adjusting these rules as needed, you can jump past your competition and make more profit in a bad economy.
You can also eliminate waste. What waste? Failed AI projects, for one, since all AI projects would now be pointed at achieving specific business value.
Better business deals, too. Think of all the banks applying very loose rules to credit and mortgage applications in an effort to seize the lion’s share of the business -- only to see the deals fall through after a closer look. Be smart about deciding what rules to give AI to pass or fail credit applications and you’ll cut the waste in exploring bad deals further -- and increase your deal closing rate, too.
Go forth and be decision driven instead of data driven!
Like all technology temptations, devilish darlings are the result of technology implementations that were really wanted at the time, but now are just a drag on the budget like technical debt and SaaS sprawl.
“Think of tech debt the same way you would financial debt: If you need to purchase something in a hurry, you’re more likely to cut corners and take on a loan, knowing you’re going to have to pay back more than you initially borrowed. It’s the same thing with tech debt -- if you cut corners in development or sink money into customization of new solutions, you’re going to have to spend more down the line,” says LeanIX’s Christ.
Take a hard look at technical debt to see if and where you can jettison some of that. Similarly, bother to examine the details in all those cloud services in which your company is now indebted.
For example, poor license management is a money drain.
“IT can’t always say for certain how many SaaS applications they are actually paying for. Second, IT doesn’t always have detailed insight into license usage and renewal schedules,” Christ explains.
Right-size your licenses, pronto. Make sure you only have as many as you actually need. Cut off automatic renewals, especially of unused applications, but of often-used SaaS, too, as that will prompt you to reexamine the number of licenses you need at renewal.
These moves “can offer some very nice cost-savings wins,” says Christ.
Scale back support but do it in a way that doesn’t cost you customers or that
ratchets up productivity costs because it takes you too long to get employees up and running again.
“Decrease the demand for IT support and ease the strain on your service desk team by reducing complexity within your technology environment. Consider the entire ecosystem that supports your hybrid workplace and keeps your digital workforce productive. Think: devices, applications, data, cloud-based storage, the works,” advises Dennis Temple, practice director at TEKsystems.
It's not just complexity in a given system that you need to reduce, but also in the sheer number of systems and applications your company has in play. Weed out complexity wherever you can to reduce strain on your IT support team. Then automate as much as you can of what’s left. That way your support team can focus only on the hard problems knowing the easier ones are already addressed.
Don’t forget self-service can also be a budget saver.
“Today’s workforce brings consumer expectations to workplace technology -- including autonomy through self-service. Many would rather seek solutions to tech problems on their own or through a chatbot than call a support phone number,” says Temple.
No, we’re not talking about axe-throwing contests at the local pub. Consider that cost-cutting shouldn’t be a solo effort. IT can only decide where to slash -- and can only find places to cut -- where it knows from training or experience to do such. But in today’s world, a simple cut in IT can make a major mess up or downstream. And that works in reverse, too.
Time to call the gang together and make the cuts an exercise in precision strategy.
For example, cuts and added efficiencies in FinOps should entail more than just cloud optimization.
“The best way to start is by bringing together a company’s IT department, leadership team, finance professionals and the DevOps team to create one collaborative and solid FinOps strategy,” says Dan Ortman, Director of FinOps Services at SoftwareONE. “By bringing these people and teams together, organizations can establish a more holistic and cohesive FinOps and cloud cost strategy that aligns with everyone’s goals.”
Take a team approach to cutting costs across the board.
“The pandemic spawned a significant increase in IT spending, and it is only natural to see a correction,” says Igloo Software’s CEO, Mike Gaburo. “For example, there was an explosion of point solutions for collaboration, communication, and knowledge sharing -- some of which were redundant -- and actually increased digital friction. But IT can’t just cut budgets to pre-pandemic levels because the world of work has changed. The modern workforce is distributed and remote, and investments need to reflect that,” he says.
Who knows? Someone on the team may point you to stuff the business doesn’t need anymore that makes additional cuts entirely painless.
That’s sounds counterintuitive, but if your IT department is short-handed or overworked to the point where tasks languish for too long, then it’s time to plug those problems and ramp up your department’s productivity.
“Leveraging solutions that make the most of the existing IT teams and skillsets allows enterprises to maximize the resources they have in place today while setting themselves up for the future,” says Wendy M. Pfeiffer, CIO at Nutanix.
You may have automated a lot already, but even so, look around to see if you can automate even more. If so, seriously consider spending the money to get it done. There are lots of ways to cash in on automation.
“First off, automation helps prevent lost revenue and unplanned costs associated with network downtime by providing a more consistent, reliable, and secure approach to maintaining network performance and compliance,” says Andrew Kahl, CEO of BackBox.
“From an HR perspective, network automation frees companies from needing to find candidates who have knowledge of specific scripting languages like Python, allowing them to hire more general or junior candidates because they don't need to do their own scripting to be fast and efficient,” Kahl adds. Onboarding is faster, too, so employees get to work sooner.
When you’re grappling with cutting licenses costs, take inventory of the features, too.
“As part of the audit, also look at the number of platforms in use and the features of each,” says Rajesh Jethwa, Chief Technology Officer at Digiterre. “With vendors competing to provide ever richer experiences and extra modules, it's easy for one to encounter ‘feature surplus’ where aspects of one IT solution can be found in another platform that the organization is already paying for. Where a feature overlap exists, it can be a simple case of activating the unused feature and migrating users over, thereby demising the now redundant platform and reclaiming the cost,” he says.
Also take a hard look at upgrade projects.
“Often there may be more feature-rich platforms on the market than can replace one or more existing IT services an organization uses. As with the previous case, onboarding a new service, say a new helpdesk/IT incident management platform, can potentially reduce a number of existing paid for services such as a password management suite, IT service catalogue platform, remote assistance software etc,” Jethwa adds.
Your vendors and partners are in the same stinky economy you are. They really don’t want to lose your business and you really don’t have the time or money to start over again with another supplier. So, team up to make the stuff you already have perform a lot better.
“Leverage advice from your enterprise software partners and learn how to make your existing solutions work better for your business, rather than uprooting entire platforms only to run into the same inefficiencies and cost barriers,” says Ryan Walicki, Founder of Relish.
You’ll be amazed at how fast you’ll get meaningful help. And if you don’t get that, then at least you’ll know that a new supplier is probably the better call.
Cut some of the inflated pricing you’re now facing in refresh cycles. You can start by reconsidering earlier wisdoms that are no longer wise in the current economy.
Case in point: virtual desktop infrastructure (VDI) and DaaS, which were once shunned for high costs and complexity. But that’s since changed. One example: Virtual desktops and cloud computing are now more manageable and affordable at scale.
“Organizations that move to virtual desktops can reduce expensive hardware dependency and reliance on chips that are in scarce supply,” says Vadim Vladimirskiy, CEO and Co-Founder at Nerdio. “This technology allows employees to use any device because the data is stored in the cloud, making the PC hardware refresh cycle obsolete. Increasing the use of virtualization and looking at desktop-as-a-service (DaaS) options for more business tasks makes sense from both a cost and security standpoint.”
Speaking of skipping refresh cycles and avoiding inflated costs for new hardware, a new spin on your old BYOD program may be just the budget-saver you needed.
"Embrace BYOD (bring your own device) to include not only phones and tablets but laptops and home computers,” says from Tim Panagos, chief technology officer and co-founder of Microshare, a Philadelphia-based smart building data solutions firm. “With the increase in hybrid work, managing IT assets in the home environment is a requirement anyway. Why not also sidestep the cost of refreshing corporate hardware by offering a BYOD program?”
Speaking of skipping refresh cycles and avoiding inflated costs for new hardware, a new spin on your old BYOD program may be just the budget-saver you needed.
"Embrace BYOD (bring your own device) to include not only phones and tablets but laptops and home computers,” says from Tim Panagos, chief technology officer and co-founder of Microshare, a Philadelphia-based smart building data solutions firm. “With the increase in hybrid work, managing IT assets in the home environment is a requirement anyway. Why not also sidestep the cost of refreshing corporate hardware by offering a BYOD program?”
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