At Tier 3 IT Solutions, we believe money spent on technology should help advance your business goals. Having a technology investment plan that is aligned to those goals will help you focus your spending on items that deliver the highest return. It is a fact that as businesses depend more on technology, their spending has increased and that is a trend that will continue for the foreseeable future. Most businesses struggle with these escalating IT costs which should be looked at as an investment that will deliver positive returns to the business rather than simply an expense.  IT is, in fact, the driving force of digital transformation with the development of new products, services, and opportunities to link with more and more customers. A well designed IT system helps a business operate more efficiently by automating routine procedures, simplifying access to information and streamlining client service procedures.  Proper investments in Information Technology also help by lowering business risks, improving competitiveness, providing smoother business operation, and increased profitability.

According to CIO Magazine’s recent survey, small businesses spend around 6.9% of their revenue on IT infrastructure, whereas medium-sized companies spend an average of 4.1%, and larger-sized businesses spend about 3.2%. IT costs reduction seems very challenging as many business leaders are struggling to meet the demand while managing a tight budget. Whether you are a small business or a large enterprise or whatever industry you may come from, evaluating IT support services and solutions is the key to refining business efficiency and removing unnecessary costs. 

How To Reduce IT Costs?

Let’s consider 6 simple ways to reduce IT costs without affecting the value of the company.

  • Embrace the Cloud

Companies that rely upon on-premises infrastructure can likely save on IT costs by transferring some or all of their data and applications to cloud based alternatives. According to a recent survey of 166 IT Executives by Datometry, 61% of survey respondents reported cost savings was the main reason for cloud migration. 30% of respondents said their existing data warehouse was reaching maximum capacity, and scaling was more relaxed and cost-effective in the cloud. 

One of the most significant savings of the cloud is that you no longer have to make large capital investments to buy or expand your servers. Because cloud services are largely based on consumption pricing models, you’ll pay for what you use. This pricing model allows the costs to grow as your business and demands grow, but also to reduce in times where you might be scaling back. Tier 3 IT Solutions is a leading cloud services provider that can help your business  experience IT cost optimization, provide maintenance and security efficiently and hassle-free, for a fixed monthly fee. 

  • Audit Your Monthly Subscription Billing

Most businesses subscribe to various SaaS (Software as a service) software applications, and may have many unused or duplicate subscriptions. You or one of your staff might have signed up for a free trial and forgotten about it, while it continues to hit your credit card every month. If it’s a small ticket item, the amount might slip for a long period of time before you recognize you’ve been wasting money.

It’s a good idea to audit your credit card statements frequently to detect any unnecessary expenditure. Cancelling unused subscription services or products can save you thousands of dollars annually.

  • Duplicated Apps Duplicate Costs

One of the wonderful things about cloud services is that as new features are added to a particular platform its subscribers generally get access to those new features.  This means that as time goes on, your cloud service capabilities typically grow into new areas.  From an IT spending perspective this means that you should regularly assess which cloud services you are subscribed to and which ones are still relevant.  For example, many businesses had adopted Slack as their internal chat and messaging platform, but as Microsoft developed Teams and included it in most Office 365 subscriptions, companies started to realize the benefits of switching from Slack into Microsoft’s platform.  Switching from Slack to Teams saved on administrative work setting up and managing users, as well as costs since MS Teams is generally included in your standard Office 365 packages. 

  • Outsourcing IT Support Services

Have you ever thought about hiring an IT support person into your business?  Have you thought about the salary, tools, and other costs associated with filling that position?  Do you honestly think that one person possesses all of the requisite knowledge and skills to support a typical business technology environment? What happens when that person wants to take a holiday, gets sick, or quits?  

In our experience most businesses with fewer than 350 computer users are not ready to hire an internal IT person/team.  To provide all of the services you get from an outsourced IT Services Provider like Tier 3 IT Solutions you would need to hire at least 3 people.  You would need a helpdesk technician, a network and server specialist, and someone to manage the department.  Adding those costs together will show you the immense value that can be extracted from having a relationship with a Managed IT Support Provider.

  • The long-term Implications of Hardware vs. Software Investment

When you purchase new hardware or software there is a large capital expense that you must bear.  However many organizations are getting access to new technology by leveraging leasing programs or moving into strictly subscription based procurement or Hardware As A Service (HAAS).  The big benefit of leasing is that your payments are stretched out over a longer period of time instead of being an upfront purchase. You can also typically write off more of the cost than using amortization schedules (but talk to your accountant about that).  Whereas a HAAS agreement allows you to add or remove devices “on the fly”.  This flexibility lets you provide your team with the proper equipment when they need it.  

  • Integrating Applications

Every time a person has to enter information into a computer system it takes time, it can also introduce errors if even a small mistake is made. In the past many businesses had manual processes that required staff to enter the same information into more than one piece of software to fulfill customer requests. There might have been one system to create an invoice for the client to pay, another to create a work order for the service team to put in the schedule, and another to create a purchase order for the required supplies. We are finding now that many software systems include options for integration with other tools, allowing your staff to enter the data in one system and to populate the others automatically.  This helps to speed up service, lower errors, and improve employee morale.  Integrating applications is a very popular method today for reducing IT costs.

Conclusion

Increasing IT costs is a reality all businesses in the digital age have to deal with. It is because the IT department today is visionary – the driving force of digital revolutions, and the creation of new innovative products, services, and opportunities to link with more customers. The rising costs of IT management also reflect the increased risk that businesses face as their dependence on technology grows and as new threats emerge. You must have a technology strategy that includes proactive planning to ensure your spending is an investment and not just an expense.

Tier 3 IT Solutions is a leading Managed IT Service Provider that helps businesses of all sizes plan, implement, and maintain the technologies they depend on so they can focus on running their business in the most efficient, and profitable manner possible.