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4 IT Budget Reduction Techniques

February 19, 2021 No Comments

Featured article by Susan Melony, Independent Technology Author

FinanceThere’s a joke in IT that no one but the department knows what it actually does, but every business needs it. That might be an exaggeration, but it’s probably not that far off the mark.

IT, for those who don’t know, means information technology. It’s a rather wide-ranging term. IT basically means using computers to store, transmit, retrieve, and manipulate information.

If you’re running a business entity, you can use your IT department for information or communications technology matters. That means your IT personnel might have many jobs in one.

However, IT can get expensive. IT specialists often command top dollar because they know that companies need them, and they have a highly marketable skill set.

For many businesses, it’s impossible to get rid of your IT department entirely. That doesn’t mean you can’t save money on it, though, if you take certain steps. Let’s cover a few of those right now.

You Can Hire New College Graduates Each Year

You may want to utilize an outside agency to handle certain IT security services, but you can probably handle many IT tasks in-house. You’ll need a competent, reliable staff, though.

Generally, the longer someone works in IT, the more money they can command. In that respect, it’s similar to any other specialized business.

Still, nothing says that your company necessarily needs high-end IT help. You might possibly get away with employing some department workers who don’t have years of applicable service.

You might be able to ax some of your highest-paid IT employees and get recent college graduates to do the same work for less. You can find a local college that you know has a reputable IT program and do some headhunting there.

There will probably be many eager graduates every year who you can convince to take a position with your company at a starting salary. Every couple of years, you can repeat this process.

Manage Your Contractors Carefully

You might have some IT contractors as well as full-time employees. Some companies use this business model if they need specialized IT help.

The issue that some of these companies run into is how much they’re paying their contractors without necessarily realizing it. You might have a strategy session where you pull all related numbers, like how many contractors you have, how much you’re paying them, and the amount of overtime hours for which they bill you.

If the numbers seem high, check for redundancies. Do you really need all the outside help you’re using, or can your regular IT employees handle some of it?

Reduce Turnover

Larger companies usually need more IT help. Many different business models require a certain degree of IT assistance to get through even the most basic tasks, particularly if you have an eCommerce company or you have remote workers using an online software suite.

You can probably eliminate your lower-level IT workers when they start demanding higher salaries because they are easy to replace. Still, you probably have at least a few IT workers who have skills that set them apart.

You can identify these workers and do all you can to keep them. Make sure to give them some perks that are likely to keep them happy.

You might think about things like gym memberships, company cars, 401K programs with matching funds, and so forth. What you can offer depends largely on your business model.

Try to Limit Offshore Resources Use

You can also use offshore IT resources. This might seem convenient at first because these employees can work digitally. You don’t need to house them in a brick-and-mortar location.

Also, many offshore IT workers come cheaper than their American equivalents. The real issue is whether they are doing as good of a job.

The reality is that some offshore IT workers cannot do as effective of a job as American-based ones. That’s not because their skills are inferior. It’s because you might run into language barriers and similar obstacles.

There are several other ways businesses can reduce IT costs, and which ones work from you will depend on many factors. You may find you’re in a situation where you can save money by using containers to virtualize servers. You could also try to find cheaper hardware, or you could go to a mostly cloud-based IT model.

Your IT department, possibly aided by outside help, keeps your business running smoothly. You need to find a way to meet all your IT needs while hopefully not breaking the bank.



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