Mistakes managers make when trying to cut IT costs

Mistakes managers make when trying to cut IT costs

Though Gartner predicts that IT spending will hit $3.9 trillion by the end of the year (rising by 3.4%), plenty of businesses still face the pressing need for budget cuts. Unfortunately, careless planning and impulsive choices can result in plenty of foolish mistakes, from internal setbacks to irreversible, public business damage.

Below, we discuss the common mistakes made by managers when cutting IT costs and how to steer clear.

Failing to prioritize or strategize

Before making drastic cuts, it’s important to have a plan. Have you consulted with your client or customer base first? With rapid, high competition in today’s business world, customer loyalty should be at the forefront of your priorities. It may help to run your desired changes by a “beta audience” to see how well they’ll pan out.

Cutting costs across the board may seem like the easiest approach, though you may end up eliminating crucial areas in your IT plan. Instead, it’s best to decide what your technical priorities and the technologies you need to meet these, cutting out equipment, software, and services that don’t make the cut.

Identifying your company goals and having a clear-cut strategy to meet these needs can lessen the impact of reduced costs, keeping your IT environment and systems in the best possible state during these changes.

Cutting out necessary, quality services

Going hand in hand with poor strategy, managers often make the mistake of cutting costs in much-needed areas. This often includes reductions in training, cybersecurity, and R&D budgets.

Investing in employees is just as important as spending on the right infrastructure. Having adequate finances to fund their development and training can enhance their agility in an ever-changing IT landscape. Similarly, your research and development team should be prioritized, as they focus on growing your business and adapting to industry changes.

Finally, never make the careless move of reducing cybersecurity. With Florida on the hot list for victims of cybercrime, data security has never been a more pressing issue. It’s thus imperative to pay close attention to cybersecurity whilst planning budget cuts, ensuring it receives the substantial funding it needs to stay effective.

Relying solely on outsourced talent

Outsourcing can bring great business benefits in certain aspects, such as partnering with managed services providers or hiring a virtual assistant. However, it helps to be smart (and of course, strategic) with your outsourced staff. Simply outsourcing everything can seem like a quick, band-aid solution, though doing so often comes with more pitfalls than gains.

A common struggle with outsourced projects is poor communication with teams you’ve never worked with before. This can include language barriers and a meager understanding of the skills required, as well as the company’s overall IT strategy. As a result, the business typically spends more time and money solving communication problems, training third parties in specific processes, and tending to mistakes that take place.

It’s therefore important to outweigh the complexities of the tasks or projects you wish to outsource before doing so. Look to quality, reputable vendors and professionals to ensure that low-grade — yet cheap — results are avoided.

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Carelessly laying off employees

Embrace automation like any other modern business, but take care in firing much-needed talent. Though automation tools can very well replace redundant and routine tasks, the employees once behind them can offer their skills in other, more important areas of business.

Automation simply increases the speed at which you operate, and makes room for greater focus on more innovative, higher-value activities. Optimize your workers in such areas instead; this helps prevent the accidental firing of those with niche (yet largely necessary) skills. Making this mistake often results in rehiring and reinvesting in the same talents you’ve lost — assuming you can find some of the same standard.

Blindly adopting the cloud

Finally, as attractive as migrating to the cloud can be (after all, reduced physical costs, greater cybersecurity, streamlined collaboration and high scalability all sound like a pretty sweet deal!), be sure you’ve done the required research and planned out your migration process before making the move.

Cost savings don’t immediately come with blindly adopting the cloud. This depends on your deployment type, application design and variability, and security and compliance requirements. Your cost model changes from capital to operational, so be sure this suits your overall financial plans.

Cloud computing comes with a myriad of IT benefits, though take the time to map out all the necessary requirements and procedures to help you better predict the costs involved, and whether the move is worth it.

Need help with your IT strategy?

IT planning needn’t be done blind. With Netcom Solutions, Florida-based businesses can receive comprehensive advice in proper network infrastructure, IT strategy, and technology implementation, helping you create a reliable, quality IT environment for your business.

Invest your budget in the right tech solutions, and enquire with our experts today.

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