According to Gartner, the global costs of enterprise IT were expected to reach nearly $4 trillion in 2019. Year after year these costs continue to grow resulting in a shift in the role of the CIO. Instead of spending time focused on bringing competitive advantages to their business based on technology, they have to spend their time finding ways to cut costs. To help your CIO refocus their time to bring your business competitive advantages instead of simple cost savings, implement these key methods to reducing IT costs:
One of the largest forms of waste in enterprise IT involves the management of their software. The costs come in a variety of forms from legal risks associated with licensing agreements to personnel costs of ensuring all departments use up to date software. Implementing a SAM tool can help alleviate some of this burden from your IT department. Generally, these tools work to automate specific processes within SAM including license management, software metering, software deployment, and patch management.
A license manager works by creating a repository for all of your license agreements ensuring compliance. This simplifies the process of managing the licensing agreements from each software your business uses. Some license management tools take this process a step further by comparing your software usage with the license agreement to find where your business is over-licensed. For example, if one of your licensing agreements allows for fifty installations of their software, but only ten people in your company use the software, you can likely reduce your costs by only purchasing ten licenses instead of fifty.
Software metering looks at how much use each software receives throughout your organization. You can integrate this tool with a license manager tool for any software that charges based on your organization’s use. This tool also shows which software your organization uses most and which software your organization barely uses. It can provide cost-saving insights into software you can operate without or find an open-source solution for software you barely use anyways.
Whenever you hire a new employee or purchase new software, your IT department becomes responsible for ensuring everything is set up properly throughout your organization. A software deployment tool automates this process ensuring consistent installations that comply with all licensing agreements. This helps you get your new employees started faster, simplifies deploying new software, and reduces repetitive work for your IT department.
Finally, a patch management tool works alongside a software deployment tool to ensure every department uses up to date software and never falls behind. It automates the process of deploying updates to any software your organization uses.
Implementing tools to help your IT department manage all of the software your organization uses can come with some upfront costs, but will save you money in the long run.
While connecting all of your storage systems can seem like a huge project, it almost always becomes worth the time and expense. Connecting your storage systems not only reduces your storage costs by allowing you to find and remove redundant data. You can also utilize a connected storage system to pull more meaningful insights into your business by having access to all of your data from a single system. By having all of your data connected, you can always be sure your entire organization always uses the most up to date data across departments.
One method of connecting your storage systems involves using a metadata engine. This brings all of your data from different storage systems into a single global namespace through virtualization. Essentially, it labels all of your storage systems as different storage tiers to keep them integrate them into a single system.
After connecting your storage systems, you can easily manipulate where you store different data based on the performance you need and the costs associated with each system. You can also created automated processes to check each data source for redundant data for removal to free up your storage. By having all of your storage systems connected, you can ensure you optimize your data for storage and put it to real use.
According to RightScale’s 2019 State of the Cloud Report, cloud users waste 35% of their overall expenses related to the cloud. This waste primarily comes in the form of over purchasing for storage and computing, or purchasing overpriced cloud infrastructure. Implementing a cloud cost management platform ensures you only pay for what you need without being locked into a single provider.
Cloud cost management platforms work by combining all of your billing and usage data across your cloud suppliers into a single dashboard. This shows you exactly where you’re overpaying for cloud services you do not use to reduce any waste. You can also use the dashboard to accurately apportion your cloud costs to each department that uses any cloud resources. Then the platform sends customized reports to each department regarding their usage and costs.
We all use contractors at some point or another whether it be for some extra hands to complete a project or a one-off project that requires specialized expertise. However, without an eye on these costs they can quickly grow out of control from overtime expenses and change orders. These hidden costs can change the course of a project from success to failure and fast.
If you find your contractor costs always end up over budget, the first item to look at is the project details you send to contractors. These details form how they produce your quote, so any inaccuracies in these documents will end up causing your contractors to give you inaccurate quotes. While a competent contractor will ask you questions about any missing details, it will still run up your costs because they will include a higher risk factor into your costs. So, make sure you’re receiving accurate quotes by creating a process to produce accurate project details.
Sometimes, the contractor simply does not know how to complete jobs they bid on and plan to figure it out as they go. This always results in huge overtime costs as they work extremely inefficiently. You should always look out for contractors that consistently bill overtime and start looking for a replacement as soon as you notice it.
To keep your costs under control, it is always a best practice to have an internal project manager looking over contractor projects. They can guide contractors on how to complete projects, create accurate budgets, and build out timelines for project completion. This helps you reel in any contractor costs, so you know their expenses prior to completing the work.
Rushed work always ends up costing more than a project delay to complete the project right. When rushed work like this occurs, it’s called technical debt and always has to be paid back. It means when a project gets rushed out the door, the project ends up costing more down the road from reworking the project to make it work properly. This occurs in software development and IT hardware projects.
Giving your team the time to do things right the first time always ends up being worth the delay in the project. You can know the project was completed properly for limited reworking. Any reworks that do need to occur end up costing less because the work was completed properly the first time. For hardware projects, this means wires were run in an organized fashion with proper protections in place. With a software project, it means the code was properly commented on and written in a logical manner.
Avoiding unreasonable deadlines also helps reduce your turnover rate in your IT department. They can have a regular schedule without weeks with massive overtime and actually enjoy their job by having enough time to figure out the projects you assign them. It also ensures your teams can fully complete each project keeping your clients happy and coming back for more work.
Making sure each of your IT divisions complete work in the same way helps them work collaboratively instead of constantly fighting each other. This also allows for more effective internal communication by ensuring all of your IT department uses the same terminology. Overall, you’ll experience less delays, higher levels of accountability, and more collaboration.
Along these same lines, make sure your IT department holds regular meetings to go over any major projects or cost saving efforts. The purpose of these meetings should incorporate collaboration between each specialist to make sure any cost saving efforts do not end up costing a different division more than the savings. This happens all too often where one division finds a way to save money, but ends up costing the organization more than they saved by inconveniencing a different division.
Whether you’re looking to save money or normalize the completion of your projects, creating clear procedures for every step of a project will help. When creating procedures for your IT department, include them in the creation of the procedures and address each of their concerns. This helps standardize each project and task the IT department completes to normalize expenses and avoid hidden costs.
While additional software tools can help reduce the costs of your enterprise IT, there are other ways to reduce your costs without purchasing additional tools. However, these other ways typically take time to implement. Some methods to reduce your enterprise IT costs without purchasing additional software tools involves:
The tools you should use to reduce your enterprise IT costs depend on where your largest expenses exist. If your cloud services take up a large portion of your enterprise IT budget, a cloud cost management platform helps organize those costs and find areas where you can save. It creates a full dashboard of all your cloud costs and usages so you can find which services with little usage that you can end. If your software costs make up one of your largest expenses, plenty of tools to manage those softwares exist. Some of the most important tools to reduce your software costs and avoid license agreement compliance issues include:
Each of these tools work to automate processes typically completed by an IT department. They generally work alongside each other to produce a more comprehensive end result.
While open-source software can seem enticing due to its low or free cost, it rarely fits exactly with an organization’s needs. The development process of open-source software revolves around creating a one-size fits all program to reach as large of an audience as possible. This results in higher employee costs to manage open-source software instead of purchasing software built for your specific needs. However, for software your organization rarely uses an open-source solution might work well enough for your needs. Switching to open-source software should be evaluated on a case by case basis instead of taking an all or nothing approach.
