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5 Out-of-the-Box Approaches to Cutting IT Spending

If your IT budget is tighter than years past but you don't want to lower the quality of the services you provide, try these ways of reducing IT spending.

As the threat of a recession looms, the days when many IT organizations enjoyed fat budgets are coming to an end — if they existed at all. That's why, if you're an IT leader, you're probably on the lookout for ways to cut IT spending.

There are the obvious cost-reduction strategies, like automating your most costly IT processes or implementing an IT hiring freeze. But if you're reading this, you've probably already thought about practices like those.

So, this article will look instead at IT cost-saving strategies that you may be overlooking. Although these techniques may not apply to all companies, they highlight the type of out-of-the-box thinking that IT leaders can use to reduce costs without reducing the effectiveness of their teams during turbulent economic times.

1. Optimize Remote Work Services

Many IT teams have spent the past two years figuring out how to support remote or distributed workforces. And because pivoting to remote work was such a priority for businesses, it was easy for IT leaders to justify a lot of IT spending on tools and services that supported remote employees.

But at this point, remote work practices are relatively well-established, and IT organizations no longer need to spare no expense in experimenting with solutions for remote workers. That means that now is a great time to look for ways to reduce the cost of IT services related to remote work.

For example, if you subscribed to multiple videoconferencing platforms (like Zoom and Webex) during the COVID-19 pandemic, now may be the time to consolidate down to one to reduce costs. Or perhaps you could reintroduce stricter BYOD policies to reduce hardware support spending.

2. Hire Contractors

Hiring contractors instead of full-time employees is a great way to reduce overall IT costs, as well as gain more financial flexibility (because it's easier to scale your workforce up or down quickly when you rely on contractors). That makes now an excellent time to consider hiring more freelance IT engineers.

Plus, working with contractors is not just a cost-saving strategy. There's also evidence that significant numbers of younger workers, in particular, prefer contract positions over full-time roles. That means that hiring contractors may not only help your IT budget, but also make it easier to find talented workers who don't want to be locked into a full-time job.

3. Redefine Your IT Roles

For those roles that you choose to keep full-time, it's possible to save some money by thinking strategically about how you define and label those roles.

It turns out that there are differences in average salary (among other things) depending on whether you label someone a programmer, developer, or engineer, for example. By revamping job titles, then, you may be able to save a little bit in compensation costs, even if in practice the roles don't really change.

4. Consider Alternative Cloud

Alternative cloud providers — meaning clouds other than AWS, Microsoft Azure, and Google Cloud Platform — are often off the radar of many IT leaders. But they shouldn't be, especially in times of economic uncertainty. Alternative clouds can deliver lower costs for some types of workloads.

So, if you're looking for an easy way to cut cloud infrastructure spending without compromising performance, explore alternative cloud offerings.

5. Explore New Cloud Services

Another way to reduce cloud costs is to migrate some workloads to different types of cloud services, even if they stay within the same cloud platform.

The bulk of cloud workloads are hosted on "bread and butter" services such as virtual machine instances and object storage. Although in many cases these services are the right fit, there are exceptions. Some applications may prove less costly to host if you operate them as serverless functions, for example.

Or, thinking further outside the box, there could be cloud services that you don't even know about but that could save you money. For instance, desktop-as-a-service, or DaaS, which replaces on-premises desktop workstations with cloud-based virtual desktop infrastructure, can save you a lot of money on desktop deployment and support under certain circumstances.

You Don't Have to Sacrifice Quality When Cutting IT Spending

Scaling back IT budgets doesn't have to mean lower quality of service. By thinking creatively about how your IT teams, tools, and services are structured, you can find ways to reduce IT spending while still delivering the same levels of service that you currently offer.

About the author

Christopher Tozzi headshotChristopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.
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