Most businesses tend to focus more on increasing their revenue and overlook the crucial requirement of cutting expenses. Business profit margins however are not just about tracking how much sales a company makes but also about its overall investments and operational costs.
The increasingly digital world is estimated to spend trillions of dollars in IT expenses. Organizations have realized the necessity of investing in IT services and their management but the big question is how much should any company invest in IT.
Budget estimation can be a complex decision to make because it is necessary to understand the business nature beforehand. Since each business is unique in its own way, the IT requirements for any company will also be inimitable.
Having realized that IT services can be the driving factor for business growth, SMBs must never lose focus on what they’re hoping to achieve from their IT systems. So how can companies achieve their organizational and commercial goals while keeping expenses at the minimum?
Here’s a look at some effective cost-cutting solutions for SMBs on how to plan their IT expenditures:
Outsourcing IT Related Tasks:
IT service requirements can range from hardware such as server farms, network services, web-based applications, security and so much more. It is an unnecessary burden for companies to have the solution for each and every IT requirement in-house.
This is where outsourcing most of such tasks can prove to be incredibly fruitful and economical for small companies as well as larger tech giants. Businesses shift the burden of risks in research, training, development, and maintenance to specialized companies who can provide these services without any of the operational overhead at a fraction of the overall cost.
Related blog: 7 IT Related tasks small businesses should outsource
Implementing Virtual Servers and Databases:
Many businesses have underutilized hardware resources. Initially, they invest a large sum of money on state-of-the-art servers not to maintain substantial installation costs, maintenance, and training costs. However, in the long run, server usages can be far less compared to the expenditure spent on acquiring and managing these resources.
Similarly, database management takes up a lot of time, effort, and money which can greatly push back a company’s profit margins. Instead of dedicated servers and databases, partitioned servers allowing multiple applications and software to reside on the same hardware prove to be more cost-effective. Virtual Servers as well as virtual databases run by sharing the hardware resources and greatly reduce expenses.
Conserving Cloud Hosting Expenditure:
It is most likely that opting for cloud computing is no longer a debuted issue for businesses of any nature. While cloud computing is already a more economical approach to many IT-related needs, there can always be room to optimize the costs associated with hosting applications and network resources online. Although many cloud service providers have ‘pay as you go’ plans, there are times when businesses acquire cloud services for a temporary project.
Similarly, there will be instances when many data stored online will have become obsolete and no longer requires to be backed up. Companies can decide on cheaper storage solutions for the outdated data and applications and terminate the resources that are no longer in use. It also doesn’t hurt to explore the market and look for alternate providers or alternate plans that effectively meet both technical and economical requirements for the company.
Using Open Source Software:
Apart from eradicating annual costs of software licenses, update costs, and even the initial installation costs, open-source codes can be a great way to customize software as per the business requirements. Developers across the world are always providing updates, customizations, and insights regarding open-source codes through various forums and platforms. It can at times prove to be faster and more effective to have global support for assistance instead of a single company supporting it.
Although it is not advisable to always look for unlicensed software, it can be useful to be able to modify the codes for various custom applications, and with the added economic benefit; open-source software can be the way to go.
Optimizing Network and Connectivity Costs:
The Internet is the most widely needed and required resource for the operation of any organization so getting the most cost-effective network connection can save companies a lot of operational costs. Different ISPs will have varying plans and packages and depending on the speed and bandwidth requirements companies should always go for the deal that gives the best services.
Often, telecommunication service providers will lease dedicated lines to corporate customers at a very reasonable price. SMBs might hesitate on the higher costs of dedicated services but when it comes to network services, uninterrupted and free from congestion services will yield much more, in the long run, accounting for smooth operation and greater user experience. After all, getting the most out of investments always matters the most.
Getting managed IT services:
It can be extremely hectic at times for businesses to manage their IT services as IT now encompasses a very large domain. Dedicated IT solution providers can offer responsive and proactive IT services at very low costs that cover areas such as security, updating and installing systems, web hosting, internal communications services, and many other IT-related services.
This can take the burden off of the management and governing bodies for managing IT services by transferring the costs and risks to such dedicated providers and enhancing other business activities.
Looking for a reliable Managed IT Service provider? Contact Fridell Solutions today.
Understanding Business’s IT requirements:
At the end of the day, cost-cutting solutions always come down to analyzing what the business needs against what it is spending on. Recognizing the IT-related requirements, then implementing proper IT service management framework and policies, and conducting regular audits to ensure the requirements are being properly implemented, all make sure that the investments are being poured into the right areas.
It is always more economical to have a solid foundation on what are the requirements and expectations from the invested IT services than regularly compensating for the lack of planning and management upfront.