Reducing IT Costs Through Efficiencies

Economic conditions are tough, right now. Sky-high energy costs, inflation driving up wage costs and raw material prices, customers suddenly cost-conscious to an almost unprecedented degree: profit margins are under intense pressure. So not surprisingly, businesses are looking to make savings. The good news: reducing IT costs can often be achieved through methods that not only reduce spending, but also improve efficiency. Let’s take a look.

Consider the Cloud

Many organisations use Cloud-based services, such as Salesforce, AWS and OneDrive. But some businesses’ adoption of the Cloud isn’t so progressed with many still preferring to run their own servers, and server-based applications.

But running those servers is costly in energy terms, and expensive in maintenance and support terms. It’s also capital-intensive: buying on-premise servers calls for capital expenditure. Cloud-based servers are often cheaper, more powerful, and are paid for out of operating expenditure.

Better still, many Cloud providers offer further savings when businesses sign-up for ‘reserved instances’, essentially, a commitment to use at least a fixed amount of Cloud time each month, as opposed to ad-hoc ‘on demand’ usage.

And as most businesses essentially use their servers, whether Cloud-based or on-premise, to support business-critical services and systems, buying reserved instances is an easy way to make savings without compromising performance.

Virtualised machines

Virtualised machines are another way to exploit the Cloud to make savings. What exactly is a virtualised machine? Simple: it’s a piece of IT equipment that doesn’t physically exist, but is created virtually, emulated in the Cloud.

Virtual desktops are the easiest way to understand the potential of virtualised machines. Because especially when it comes to so-called power-users, the cost of powerful desktop machines can quickly mount, even more so when software is taken into consideration.

The alternative? Equipping those users with less powerful, inexpensive desktop machines, and then using software emulation in the Cloud to create a far more powerful desktop environment, complete with software. Users get a faster, more powerful desktop experience, and businesses benefit from buying inexpensive local physical desktops.

Energy savings also result from virtualisation.  Instead of having physical devices powered up, running 24/7, and requiring cooling, think domain controllers, for instance, a single virtual host could house 10–12 such devices, for the same running cost as one physical device.

Likewise, Cloud-based software emulation can create virtual versions of specialised servers and data warehouses, thereby usefully cutting costs when it comes to running expensive SQL databases and ERP systems such as SAP. Not so long ago, hardware constraints meant that this wasn’t possible with such resource-hungry applications: performance would suffer too much.  No longer.  So it’s time to look afresh at virtualisation in the context of databases and ERP systems, and again, there are benefits other than lower costs: with virtualised machines, it’s much easier to perform Cloud backups, for instance.

Outsourced IT support

Outsourced IT support is yet another opportunity to simultaneously achieve a better performance, at less cost. Outsourcing support to a specialist firm brings access to skilled and capable personnel, with up-to-the-minute knowledge of current technologies and business applications. Better still, they’re available 24/7, if needs be.

Yet because providers of outsourced IT support provide support to multiple clients, they can manage staff utilisation far better, and more efficiently, than a single business is able to do. Typically, that means that the cost of supporting the average incident or query is consequently less than in a single business, delivering a lower overall cost of support.

So where a business on its own might have to employ a network administrator (typical salary £40K), a systems administrator (typical salary £35–40K), and a technical architect (£80K), outsourced IT support means that it would only pay for those people when it needed them, bundled into the flat-rate monthly support fee.

Outsourced IT support makes sense, and lowers costs, in a variety of situations. Outsourced IT support providers can work alongside an in-house IT support team to support specialist areas, such as cyber security, or replace the in-house capability completely.

Similarly, if a business is relying on multiple sources of support, in terms of different geographies, different software applications, and different infrastructure areas, for instance, consolidating onto a single provider can both simplify things, as well as reduce costs.

Energy-efficient IT equipment

Today’s IT hardware is far more energy-efficient than the equipment commonly in use ten or twenty years ago. Today’s servers, for instance, differ hugely from the huge monolithic cabinets of yesteryear.

But that doesn’t mean that energy efficiency shouldn’t be on the agenda, or that IT electricity consumption can be regarded as irrelevant.

Far from it, especially today, when electricity costs are so high. Because these days IT equipment is so pervasive within businesses, facilitating almost every business process, there’s so much equipment that the power consumption aspect of that IT footprint can’t be ignored.

Energy-efficiency audits, therefore, make sense, especially where older technology is involved. Consider replacing it, upgrading it, or moving the relevant functionality to the Cloud. Don’t forget to look at infrastructure, either: devices such as routers, printers, and network switches can easily be overlooked, yet are so pervasive that their power consumption quickly adds up.

Don’t forget, too, to make use of the ‘sleep’ function built into modern desktops and other equipment. If the business doesn’t work 24/7, then there’s no point having equipment powered up and running 24/7.

Reduced software licensing costs

Finally, consider software expenditure. Is the business paying licence fees for software it no longer uses? Is the business paying for more software licences than it needs? When rolling out a new software application, did anticipated usage outstrip subsequent actual usage in practice? In each case, there’s an expenditure being incurred that adds no value to the business.

And today, there’s simply no need to incur this cost. So in addition to carrying out an audit of what software the business actually uses, and comparing it to the software that the business is paying for, start examining your software vendors’ flexible month-to-month billing options, which will better scale to your business requirements.

The bottom line

In summary, today, more than ever, cost control matters. And because IT is so pervasive within businesses, its impact on the business’s overall cost can’t be ignored. Yet taking steps to reduce that cost need not be difficult.

And better still, as we’ve seen, reducing IT costs doesn’t mean reducing IT performance. Better, faster, and also cheaper: it is genuinely possible.