5 Important Ways Businesses Can Cut Down On IT Costs


Do you remember how the old saying goes; “You can’t cut your way to development”???

However, it looks like you can.

Natural catastrophes and terrorist attacks, as well as a tanking economy or an aggressive worldwide pandemic, are all reasons why an organization may need to make rapid budget cuts to survive.

COVID-19 has changed the way people spend their money, and many firms, such as cruise lines, airlines, and movie theatres, simply have no choice except to decrease expenses

IT expenditures are a significant portion of every organization’s budget. However, cutting these costs might be challenging when there are so many other objectives and many expenditures appear to be fixed.

Even also reduced their IT cost when Google and Hollywood sued them.

This article will demonstrate that many IT expenditures are not as fixed as they look and will provide recommendations for decreasing the IT budget.

How Can Businesses Cut Down IT Costs?

When most IT budgets are examined, people’s expenditures are frequently the most significant expense. Fortunately, there are several techniques for lowering labor expenses, which we will cover in this article.

Therefore, let’s take a look at the following strategies so that we can provide companies with some new ideas to lower IT cost:

1: Reduce IT Personnel Cost

Many IT businesses have a top-heavy staff structure, which develops over time. While having experienced employees make it easier to do the task, it is inefficient in terms of cost.

Several businesses implement periodic worker cutbacks to return job numbers to appropriate levels to address this. However, these activities have ramifications since they may produce a significant degree of anxiety in the business.

They can also be avoided if policies are in place to incentivize managers to keep the organization at the proper levels without experiencing the agony of layoffs.

2:  Virtualize Servers With Containers

It wasn’t long ago that every application required a dedicated server, and this number grew due to test servers, DR servers, and so on. However, since many of these servers were underutilized, hardware expenses were not optimized.

If you still have dedicated servers, you may save money by dividing them to allow various apps to share the hardware. Containers are an excellent way to extend this notion.

Linux containers are lightweight and portable self-contained runtime environments. It may also reduce hardware costs since all those services may be operated on the same system.

3: Manage Your Contractors

Contractor expenditures may spiral out of control when treated as a distinct bucket. Alternatively, some firms may hire more expensive contractors than necessary because it will give them adaptability if market conditions change.

Although this is valid, employers should not ignore how tough it might be to fire contractors with specialized talents.

To ensure that your business is focused on the cost of contractors, keep track of the number of contractors you have, the price you pay them, and the amount of overtime they perform.

4: Virtualize Databases

Database technology increasingly establishes a core image and subsequent databases that are iterative modifications to that core. For example,  a full-sized test database may take up very little space because it just refers back to the production instance.

In addition to lowering storage costs, this can result in significant productivity gains for developers too.

For example, suppose you virtualize the database. In that case, you can have an increased ability to run a test cycle, make corrections on time, save a database image, and finally, go back to the original image to rerun the test.

5: Use Open Source Software

Open-source software removes the initial cost of obtaining software and the recurrent monthly maintenance expenditures. However, open-source is much more than a cost-cutting strategy.

You have access to the source code with open-source, allowing you to make your own changes. Furthermore, code updates are done by engineers from several firms. Thus the program frequently improves quicker than if only one company supported it.

Finally, if you have a problem, you are not limited to the program supplier for support; but instead, you have various possibilities.

Final Note

One common difficulty with IT cost-cutting is that not all cost savings are actually saving for the firm.

For example, a significant business may charge separate IT groups a fee for mainframe utilization. These organizations may spend time improving the efficiency of their programs to minimize their mainframe expenses.

However, if the more significant business has a mainframe contract that is not affected by these changes, the expenses will be borne by other IT divisions.

So, if you want to know more about it, share your questions in the comment section.

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