Taking a proactive, strategic approach to cost reduction in IT

We are experiencing an uncertain and unstable economic environment, and many organizations must look for ways to determine immediate IT cost savings. CIOs must find a way to approach cost cutting in the least damaging way for both the medium- and long-term health of their business.

Gartner has shown that while taking short-term reactive measures are inevitable, as seen during the financial crisis of 2008-2009, companies that deploy sustainable cost reduction programs significantly outperform the competition. In fact, they emerge as strong and profitable winners.

Here are five areas where we see opportunity to strategically optimize and reduce costs:

1. Control SaaS Sprawl

As organizations have jumped into response mode, remote working environments have been rapidly deployed. Licensing for remote working is being purchased at scale, and virtual machines are being spun up without the guidance and controls that would normally be in place. Before the pandemic, studies showed that 30%-40% of SaaS spend was wasted, meaning the average loss for a company of 1,000+ employees was in excess of $2M. Recent statistics show that SaaS usage has since increased by 46% as a result of the crisis, resulting in more wasted dollars than ever before. Organizations that proactively monitor such SaaS spend will find themselves in a more secure and sustainable position post these turbulent times.

2. Shadow IT

Employees want to be productive, even while working remotely. Unfortunately the events that brought us to our “work from home” situation today – were not planned and did not prepare us for the tools needed to productively or securely work in a remote environment. In many cases, employees and sometimes entire departments, have begun downloading or purchasing tools to support their remote working environments, regardless if they are compliant or not. This means IT departments are uncovering unauthorized applications, exposing the business to various levels of financial, security and compliance risks. Gaining visibility of these unauthorized activities, and enacting governance to counteract them can provide you with savings not only financially now, but in the future with the potential impacts of a breach or audit.

3. Streamlining Solutions and Reducing Duplication with Native Tools

It is common for organizations to employ multiple solutions for security, productivity, and team collaboration. However, by streamlining an effective solution like Microsoft 365, you have almost all of the security, productivity and collaboration tools you need. Understanding what you already own, and how it can support you offers opportunities to reduce the duplicative spend that you have in your environment today.

4. Understanding Licensing Models and Being Prepared for Highly Anticipated Audits

With the need to respond at a rapid pace to today’s environment, having the knowledge of licensing models, re-harvesting, and Bring Your Own License, can save you significant expenditures. But having the knowledge of hundreds of publishers is not an easy feat. Trusting in a licensing expert who understands the publishers, their constantly changing licensing models and compliance risks can provide you with peace of mind in regards to cost controls and savings. Sprawl, shadow IT and the complicated licensing models are the catalyst that lead to serious implications down the road. It is anticipated that publishers will be waiting on the sidelines to begin auditing at speed. By ensuring that you have a strong software lifecycle management solution in place, you hold the upper hand and have more control over your compliance and financial destiny with them.

5. Outsourcing and Managed Services

With managed services, organizations can reduce operational costs, conserve capital budget and lower IT operating expenses. Outsourcing can help a firm stay focused on revenue-generating activities and innovation. The Managed IT Services Provider can handle mundane tasks, and the organization can get their work done more efficiently without the distraction of technical troubleshooting. Leveraging an expert for new project work to reduce cycles and spend and keep your staff focused on mission critical applications.