101 IT Cost Reduction Strategies for 2019 that work without fail
No CIO can get away with responsibility of IT cost reduction to generate savings required to execute Digital transformation projects. Here are 101 (One hundred one) IT cost cutting strategies which allow IT and business leaders to reduce wasteful IT expenses and generate savings to improve business profits.
Monitor and set budgets for all kinds of cloud spending (Iaas,PaaS,SaaS)
A leading industry report recently advised that more than 30% of cloud spend in an enterprise is wasted.30% is a lot of free money going in pockets of Amazon, Microsoft, Google and few other cloud providers. To control wastage of cloud resources. Here are my 2 recommendations. Number one – Review and remove, unused, temporary, test and development instances which need not run, 24×7.if possible, move test and development instances to low cost regions, to save IT costs. Number two – Review resource utilizations of all provisioned Instances. Wherever CPU or memory utilization is low, downsize VM’s to reduce IT costs. Remember, good Governance of cloud spending is a must, to avoid money wastage.
Here is my YouTube Video to explain this IT Infrastructure cloud cost optimization strategy.
Review non-it spending impacting the it cost center
Finance teams have little understanding of IT spend classification. In their rush to close the monthly books, they are likely to post non-IT invoices into the IT cost center (an example that could involve wrong cost booking could be ‘Internet charges for CEO’s home internet connection’). Identifying and removing such transactions from the IT budget can save IT cost.
Here is my YouTube Video to explain this IT cost management idea
Secure price protection on future software licence purchases with the initial order
Software vendors like Microsoft, Oracle, SAP, IBM etc. give volume-based discounts on licenses that are purchased when signing up. However, they may not offer discounted rates when purchasing additional user licenses for the same software. It is best to lock future pricing for 3 to 5 years while signing the initial software licencing agreement.
Here is my YouTube Video that explains this trick to control wasteful Software licence expense
Publish a report of wasted technology investments
Every year, business leaders come up with new automation requests. The new requests often get approved without the much understanding on user adoption,of automation done in last 12 months. Many times business teams request the latest and greatest software only to scrap it next year, thus wasting company’s hard earned cash. To manage this problem, I advise that before start of the budgeting season, IT leaders should publish a IT Effort Wastage Report, which lists all the recent go lives, with poor user adoption. Having a view of wasted IT investments, will surely make business leaders have 2nd thought before demanding new automations and thus help you reduce IT cost.
Here is my YouTube Video to explain this IT cost optimisation idea
Compute 5 Year Total cost of ownership before buying new application
We are living in times where a good amount of IT spending is happening outside IT’s control. Also known as shadow IT, Such spending, is influenced by vendors, who do tell your business teams about, the full cost of building, running and maintaining technology solution for a long term. To avoid being hit by unknown costs in future, Ask your teams to include costs of maintaining Integrations, performing system upgrades, doing regular backups, DR,
Security and cost of keeping legacy systems up into the TCO calculations.I recommend that is best to compute the total cost of system ownership or TCO for 5 years before approving any project. Knowing the full costs, will help you make the right decision for your company, be it buying a new or replacing an existing application
Here is my YouTube Video to explain this IT business case cost management idea
Cancel projects in which the project sponsor is not committed
Once a project starts, business leaders expect the IT department to do all the heavy lifting while they wait to celebrate the go-live. In the absence of commitment from the project sponsor, a project is likely to miss its goals (as was committed in the business case) and thus lead to poor or negative ROI.Use any of known project portfolio management tools to track performance of IT project CA-PPM, Planview, Microsoft Project etc.
Implement it chargbacks or showbacks
A good designed IT chargeback system will force the business to make choices on which IT services they need and are willing to pay for, The key benefit of IT chargeback or show back is to reflect fully loaded IT costs against the part of the business and users that utilises those IT assets and services so that the profit and loss statement can be accurately estimated. While a manual spreadsheet based process of computing chargeback can be cumbersome, there are many companies like Apptio, Clear Cost, Nicus which provide automated solutions to help IT and Finance leaders in producing timely and accurate chargeback reports.
As IT Cost reduction Expert, With 15 years in saving Millions in IT Cost & Delivering 10X ROI on IT Investments for global multibillion-dollar companies. I offer unbiased, vendor agnostic and practical advice to individuals and companies for reducing IT Cost & securing funding for digital transformation initiatives. My actionable advice has helped business leaders become SMART, GAIN Credibility & WIN Trust of Board, Investors, CEOs, CFOs & CIOs.
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Sometime last year I published my own book titled Reduce IT Cost 101 Questions for Business and Technology Leaders to Save Millions in It Spending, Available on Amazon.com, My book has collection of 101 proven field-tested techniques to reduce IT cost. Written for time-starved business and IT leaders who are responsible for reducing IT costs and improving the overall profitability for their company. 101 cost saving ideas from my book can help your organization save millions in IT spending. Written in simple, nontechnical language, with ideas generated from real-life experience gained from frugal IT departments of – global companies, all the suggestions provided are time-tested and proven to deliver committed savings.
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