At Coretek, we’ve worked with hundreds of clients over the past two decades. Time and time again we’ve seen the same mistakes where businesses are throwing money away unnecessarily on IT. This is true for both smaller businesses without someone overseeing IT and also for larger businesses who are struggling to track IT spend across multiple offices and departments.
The good news is that most of these mistakes are quick and easy to resolve. Just by fixing a couple of the points on this list, you could save your business thousands.
So, let’s get started. Here are the 10 most common ways businesses waste money on IT and the quick fixes to start saving you money right away.
1. Wasting money on unnecessary software
Let’s start with a big one that can make an immediate impact in reducing your IT budget. If your business has been operating for any length of time, it’s likely that you have signed up to a number of different software products. The current trend is for software costs to be paid monthly (also known as SaaS), which is an excellent way of spreading costs but has the downside that these payments are ongoing, and sometimes you might even forget you’re paying for them.
How to fix it
It’s time to make a full inventory of all the software you’re paying for. Evaluate what business benefit you’re getting from each piece of software. Is it providing a good return on investment? Are there cheaper alternatives? Go through the entire list and you might be surprised just how much money you’re paying for unused or ineffective software.
2. Not tracking license counts
Once you’ve got your software in order and you’re happy with the suite of products you’ve chosen, the next step is to not pay for too many licences. This is much more common than you might think. All it takes is for a few employees to leave without removing their licenses and suddenly you’re paying thousands of pounds on software for staff that don’t even work for you anymore.
How to fix it
As part of your software inventory above, include licence counts and then cross reference these against your current staff numbers. Even if a piece of software is used by a current staff member, consider if they really need this as part of their job. For example, do they have a Microsoft 365 Premium licence when they actually only need Basic?
3. Too many expensive on-site servers
If your business still relies on having several on-site servers located in your office, it’s time to review whether these are necessary. There are instances when it makes sense for some businesses to keep their servers on premise. However, in the majority of instances, most businesses are going to experience considerable cost savings by switching to software, virtualization and cloud-based solutions.
How to fix it
Carry out a server inventory including which services are provided by each server. Does this need to remain on site or is there a more cost-effective alternative?
4. High energy bills from outdated hardware
Although it might seem counterintuitive to consider replacing hardware as a cost-cutting exercise, consider that energy costs are at an all-time high. After you’ve considered if you even need the onsite hardware from Step 3, the next step is to make sure that you’re not getting stung for energy costs from outdated equipment. Modern desktops, laptops and IT hardware are designed to be extremely energy efficient and sometimes replacing old equipment will actually save you money in the long run.
How to fix it
Review any on site hardware that you own. Check for possible cost savings by replacing this with more energy-efficient, modern alternatives.
5. Not utilising the cloud
As we’ve spoken about several times before, cloud computing is a revolution in the IT industry. By moving away from expensive on site hardware, businesses of all sizes have access to modern, fast and secure systems through the cloud. There are several cost saving benefits to doing this. Firstly, most cloud services can be paid monthly, which is much easier to budget for. Secondly, there are no costs for replacing or repairing equipment. This is the responsibility of the cloud provider. Finally, making use of cloud services is likely to reduce your energy costs as you need less electricity to run the equipment and air conditioning to keep it cool.
How to fix it
Review your current IT services and look for any opportunities where these could be migrated to the cloud.
6. Not accurately tracking cloud spending
Without doubt, hosting your IT services in the cloud has some huge benefits. However, there are some factors you need to consider.
If you are using one of the main public cloud providers such as Amazon, Microsoft or Google, you will need to calculate your usage, and getting this wrong can prove costly. As we discussed in our previous article on the Cloud Paradox, a Gartner survey found that organisations that fail to plan this correctly are overspending by about 40% in the cloud.
How to fix it
The key is to make sure you have the right cloud services for your individual business. Although it’s very unlikely you’ll be better off by going back to on-premise, Public Cloud isn’t the only option. One alternative is to utilise a Hybrid Cloud approach, which uses the best bits of public cloud, alongside your own private cloud, which you have full control over. See our article on Cloud Computing to read more about the different cloud platforms and how to choose the right one for you.
7. Personnel
You probably noticed by now that many of these points are interrelated. Personnel is always one of the highest costs for any business. To run and maintain a large on-premise IT infrastructure not only costs money in hardware and energy but also for the large team of IT engineers needed to support and maintain it.
How to fix it
With a leaner, cloud-based environment, the responsibility for supporting and maintaining the infrastructure is down to the cloud providers themselves, reducing the need for a large internal IT team. Another option to consider is outsourcing. By employing the services of an MSP like Coretek, you get an entire team with a range of specialities, often for less than the price of one engineer.
8. Not automating simple tasks
Your IT money-wasting might not only come in the form of software and hardware but also by not using technology to its fullest. For instance, does your business have several manual or repetitive processes that could be easily automated or made more efficient? There are numerous examples of these kinds of tasks – meeting scheduling, meeting transcription, social media posting, data entry, document signing and many more.
How to fix it
Audit the most common processes in your business. Consider if there’s a possibility this can be completely automated or at least made more efficient by technology. If you aren’t sure what technology solutions are available, speak to your IT consultant or MSP.
9. Not investing in adequate security
Here’s another one that might seem counterintuitive but in some instances, you have to invest in your IT upfront to save money further down the line. This is never truer than with IT security.
The numbers speak for themselves. The 2022 Cyber Breaches Survey showed that 39% of businesses in the UK were a victim of cyber attacks with an average cost of nearly £20,000. This shows how important it is to have suitable IT security in place.
How to fix it
A great place to start is the Cyber Essentials certification. For only a few hundred pounds, your business will be checked in the five key areas of IT security and you’ll have the peace of mind that you’re meeting a good baseline level of security.
10. Using overpriced vendors
As the adage goes, you often get what you pay for. However, sometimes we see businesses using expensive vendors when there are alternatives who provide an equally good product at a much lower price. One specific example is wireless networks. Coretek are happy to recommend Ubiquiti to all our clients because we know the level of quality is equal to their competitors, who are often charging two or three times the price. This is compounded further by having to pay additional licence costs on top. Server virtualization is another example where you are paying a premium for certain brands, even though the product itself offers a similar set of features.
How to fix it
Carry out a supplier audit on a regular basis, such as every three months. This should include a price check and an overall review of performance and service levels. Inertia often leads to businesses staying with suppliers simply because they have used them in the past and it’s a hassle to change. By regularly scheduling this review time, you will have the opportunity to sit back and evaluate whether you are getting best value from all of your suppliers.
Summary – How to reduce your IT costs
In summary, here are the key ways you can start to reduce your IT costs right away:
1. Stop wasting money on unnecessary software
2. Start tracking license counts
3. Avoid having too many expensive on-site servers
4. Reduce high energy bills by removing outdated hardware
5. Ensure you properly utilise the cloud
6. Accurately track cloud spending
7. Consider outsourcing IT personnel
8. Use technology to automate simple tasks
9. Invest in adequate security
10. Avoid using overpriced vendors
If you need help implementing any of the IT cost saving measures in your business, get in touch with us today.