How to Cut Your IT Costs Without Sacrificing Quality
Are your business’s IT costs making a big dent in your bottom line?
The average small business spends about 7 percent of its revenues on IT. So if you’re making $1 million every year, only about $70,000 is going to IT. A drop in the ocean, right?
Correct, but since technology advances rapidly, your IT expenses can increase significantly within a short time. You might need to upgrade your systems often or make investments in your IT to better respond to emerging online threats.
Don’t let rising IT costs drive you out of business. Read on to find strategies you can use to cut your technology costs without hurting the operational efficiency of the business.
Don’t Go for Top-End IT Hardware
A big chunk of your IT budget will go into purchasing hardware, such as computers, servers, printers, and scanners. Whether you’re upgrading legacy hardware or equipping your business for the first time, resisting the urge to go for high-end equipment can save you a lot of money.
It’s understandable that you want your business to have the latest, top-of-the-range computers, but when money is tight, go for cheaper devices. They might not boast of the same specs as top-end models, but as long as their performance meets the needs of your business, everything will be fine.
Staff Your IT Department With Cost in Mind
As your business grows, there’s a need to have in-house IT specialists. However, don’t make the mistake of establishing a full-fledged IT department before your business is capable of bearing the financial cost that comes with it.
The cost of labor is usually the highest expense for most businesses, so hiring more IT staffers than necessary will increase your expenditure. Besides direct labor costs like salaries that come with having IT employees, there are also indirect expenses you’ll incur, such as office space, equipment, and supplies.
Utilize Cloud Technology Solutions
The cloud tech industry is worth $150 billion in 2023, up from about $24 billion in 2010. This phenomenal growth is driven by the fact that more and more businesses are using cloud solutions to cut costs and improve efficiency. It’s no wonder over 80 percent of U.S. enterprises are utilizing various cloud technologies.
Some of the cloud services you can use to cut costs include hosting and storage. For example, instead of having physical services, which consume space and need cooling migrate to cloud-based servers. The upfront cost is not only lower than acquiring your own physical servers but also reduces your commercial space and energy expenses.
Outsource IT Functions
In many cases, outsourcing is cheaper and more effective than having in-house employees. Although this involves working with third parties, a well-resourced service provider will offer you quality services at about half the cost of keeping an in-house team.
You can outsource a few or all IT functions, depending on their complexity. There are several companies offering managed IT services that will take over all your IT department functions. However, be sure to research and find an experienced company that you can trust.
Start Trimming Your IT Costs
In today’s digital age, it’s impossible to run a business without technology. But while technology increases productivity and efficiency, it comes at a steep cost, especially for small businesses. Yes, IT costs are unavoidable, but you can use these strategies to reduce them.
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