Many small businesses across the country are working through tough decisions on how they can best manage their budget. Considering IT spending is a substantial line item in any organization’s budget, finding ways to reduce it can make a massive difference in improving cash flow.
Conserve Cash by Reducing IT Spend
When you truly think about it, labor costs make up the most significant percentage of IT spend, so it’s important to ensure that you’re getting the best value out of your IT provider. We also recommend getting second opinions on any large IT purchases, as many businesses tend to invest way more than necessary. However, there are many things you can do in the short term to optimize IT spending, and our team has gathered a list of them here.
Our team suggests taking a structured and programmatic approach to IT cost optimization. Research shows that organizations that strategically invest during tough times are more likely to emerge as leaders. But sometimes, difficult times can call for equally difficult actions.
Here are five key things your small business can focus on right now.
1. Optimize Cloud Spending
If your small business has any IT infrastructure in the cloud, you more than likely have idle resources that can be lessened or eliminated. A key benefit of the cloud is that it allows users to pay for resources by the hour, which is why it’s crucial to take advantage. For example, if you only utilize cloud instances on weekdays, make sure you aren’t paying for 24/7 usage. It’s also wise to look into Reserved Instances for AWS and Azure. This is because they provide significant discounts in exchange for temporarily reserving a virtual machine.
Many businesses see major savings when using Reserved Instances, so it may be worthwhile to finance them and pay upfront to lock in your savings. Another area of focus should be your backup storage. You can downsize your backup solution by deleting any data that no longer needs to be stored. You can also move any data that needs to be kept but not regularly accessed into cheaper storage options. Some examples of good cloud options are Azure Blob Storage, Amazon S3 Glacier, along with hardware units like a Synology NAS. You can learn more about creating a comprehensive data backup strategy here.
2. Keep Software Licensing Up to Date
Auditing your software licenses is one of those tasks that always seem to fall through the cracks. It’s quite common to see businesses paying for additional user licenses that they’re no longer using. This is why it’s essential to do a thorough audit of every piece of software that your company works with and ensure that all licenses that you’re paying for are necessary. Many organizations can score a quick win by looking at their Office 365 licensing and active mailboxes. In many cases, clients are paying for licenses associated with former employees, and by auditing the Office 365 and licensing costs, they can significantly reduce costs.
3. Reduce Connectivity Costs
Over the past several years, internet speed and capacity have only seemed to get better, but many businesses are still paying for an internet package that’s 5+ years old. Asking your internet service provider (ISP) for updated service plans or shopping around with different ISPs typically yields internet packages that offer superior internet quality for less money.
The same principle applies to your phone system and cable service. They may offer temporary discounts for temporarily pausing services, or you might be able to find better options available for your organization. Another thing to note is that many telecommunications brokers offer free audits, meaning you can quickly find out whether you’re paying too much for connectivity services.
4. Take Advantage of Partner Programs
When updating or migrating your IT infrastructure, several technology vendors have partner programs that offer up to $15,000 of coverage in costs. For example, Microsoft provides a wide variety of cloud readiness programs that help fund Azure migrations, cloud assessments, and Microsoft Teams adoption. This can help businesses save on IT projects that were already scheduled and allow them to update and modernize IT for no cost.
Partner programs consistently update their offerings, so we recommend contacting your IT provider for more information about current availability. If you need any additional guidance, you can always reach out to our team, and we’ll be more than happy to assist.
5. Consider Leasing Options
Due to the current global uncertainty, several companies are delaying the rollout of their planned IT projects. However, you may want to consider leasing options if you have critical infrastructure upgrades that need to be tended to. As partner programs can provide comprehensive assistance and vendors can offer substantial discounts, this option becomes even more attractive. So, if you currently need to invest in your IT, you’re able to conserve cash via leasing options.
Leasing has evolved quite a bit since the past days of traditional equipment financings. Businesses can now include software licenses, Reversed Instances, and labor costs into digestible monthly payments. If you’re unsure of where to look, we can help point you in the right direction.
Reduce IT Spending Without Sacrificing Critical Infrastructure
IT spending often feels out of control, difficult to understand, and extremely convoluted. We believe that IT costs should be transparent, planned out in advance, and budgeted for. Our team strives to provide our community with the proper tools and resources to be successful and focus on operational continuity. If you have any comments or questions about how you can optimize IT spending without forgoing critical IT infrastructure, we’d love to help.
At Parried, we offer the IT support and consulting you need to eliminate IT challenges and grow your business. We design our services to scale with your business as it grows. We act as an extension of your business as your complete IT partner, providing our services with your best interests in mind. Contact us today to start a conversation.