Global IT investment is anticipated to hit £3.2 trillion this year, according to a report released in January 2021 by global research and advisory group Gartner. That is an increase in tech spending of 6.2 percent, as per Gartner’s forecast, businesses will also invest in business software and hardware such as smartphones and personal PCs. Despite rising IT budgets, resources are still few, and businesses continue to lose money—whether on purpose or not—due to inefficiencies, subpar planning, and a lack of monitoring. 

Are you Wasting Money on IT?

Over the years, Workplace Connect has collaborated with a wide range of clients. 

We frequently witness the same errors where firms waste money on technology when it is not necessary. This is true for larger companies that struggle to track IT spending across numerous locations and departments as well as smaller organizations that do not have an IT manager.

The good news is that the majority of these errors are simple to fix and take little time. You might save your company thousands of dollars just by addressing a few of the issues on this list.

So, let’s get going. These are the top 10 ways how organizations can waste money on IT, along with fast fixes that can start saving you money right away.

1. Spending money on useless software

Let’s start with a significant one that can reduce your IT expenses right away. If your company has been in operation for any period of time, you have probably subscribed to a variety of software packages. The current tendency is to pay for software on a monthly basis (also known as SaaS). While this is a great approach to spread out expenditures, it has the drawback that these payments are continuing and occasionally you might even forget you’re making them.

Solution

It’s time to take an exhaustive inventory of every piece of software you’re purchasing. Determine the business benefit each software component is providing. Is the investment yielding a good return? Exist any less expensive options? You could be shocked at how much money you’re spending on useless or underutilized software if you go through the overall list.

2. Licenses that aren’t in use

Paying for software license fees frequently accounts for a sizable amount of any company’s technology expenses. Research indicates that 38% of enterprise software licenses are actually inactive, which might cost companies as much as £28 billion yearly.

Cutting license fees for former employees can help businesses save money, but doing so may result in the loss of crucial data associated with those accounts and a breach of data retention regulations. Companies may incur monthly expenses of £17–25 per user for the storage of this data.

Solution

Companies should routinely evaluate their license utilization to ascertain how many unused licenses they are paying for in an effort to remove this cost. IT departments can decide whether a strategy for backing up the data associated with all these licenses would prove to be more cost-effective once they have a clear understanding of how much they are spending.

3. Too many costly on-site servers

It’s time to consider whether you still need a number of on-site servers at your workplace if your company still depends on them. Sometimes it makes sense for certain companies to maintain their servers on-site. Yet, migrating to software, virtualization, and cloud-based solutions will typically result in significant cost savings for most firms.

Solution

Create a server inventory that includes the services each server offers. Is this something that needs to stay there, or is there a more affordable option?

4. Outdated IT Hardware

Many businesses continue to use outdated hardware, which comes with a hefty price tag. Managing physical servers, including the costs associated with powering and cooling them, is a common part of updating and maintaining IT infrastructure. 

Over time, the cost of maintaining this infrastructure also has a tendency to rise. For instance, a 2017 study discovered that the expenses for the upkeep of an average server had climbed by 148% by the time it is five years old.

Solution

The necessity for this pricey hardware can frequently be eliminated by new technological developments. Today, it is possible to host several servers on a single piece of hardware and keep crucial company databases and apps in the cloud. Even if some of these initiatives demand an initial financial outlay, they may ultimately prove to be more profitable.

5. Not using the cloud and storing data inefficiently

In the field of IT, cloud computing has revolutionized everything we know. Businesses of all sizes now have access to cutting-edge, quick, and safe systems through the cloud by eschewing costly on-site hardware. This has various advantages in terms of cost savings. 

First off, the majority of cloud services may be billed monthly, making budgeting considerably simpler. Second, there are no expenses for equipment replacement or maintenance. This is the cloud service provider’s obligation. Third, using cloud services will probably result in lower energy expenses since less electricity is required to run the technology and air conditioning to maintain the desired temperature.

Solution

Look for any chance to evaluate your current IT services and move them to the cloud.

6. Cloud spending is not accurately tracked

Hosting your IT services in the cloud has unquestionably enormous advantages. There are several things you should take into account, though.

You must estimate your usage if you use one of the major public cloud providers, such as Amazon, Microsoft, or Google, and getting it wrong could be expensive. According to a Gartner report, businesses that don’t properly plan their cloud spending overspend by roughly 40%, as we covered in our earlier piece on the cloud paradox.

Solution

Making ensuring you have the appropriate cloud services for your specific organization is crucial. Public Cloud isn’t your only choice, even though it’s quite improbable that you’ll be better off switching back to on-premise. Using a hybrid cloud strategy, which combines the best elements of public and private clouds and gives you complete control over both, is an alternative.

7. Manpower

At this point, you’ve undoubtedly realized that many of these points are connected. One of every business’s largest expenses is always labor. Large on-premise IT infrastructures are expensive to run and maintain because they require a large staff of IT engineers to support and maintain them. This cost is in addition to the hardware and energy expenditures.

Solution

A smaller internal IT workforce is not required in a cloud-based system because the cloud providers themselves are responsible for managing and maintaining the infrastructure. Outsourcing is another choice to take into account. You may acquire a whole team with a variety of specialties by using the services of an MSP like Workplace Connect, frequently for less than the cost of one engineer.

8. Failing to automate easy tasks

Your IT spending may be wasted by underutilizing technology as well as by purchasing unnecessary software and hardware. For instance, are there numerous manual or repetitive activities in your company that may be quickly automated or otherwise improved? These jobs come in many forms, including organizing meetings, transcribing meetings, publishing on social media, entering data, signing documents, and many others.

Solution

Examine your company’s most typical processes. Think about whether something can be fully automated or at the very least improved by technology. Speak with your IT professional or MSP if you’re unsure of what technological options are accessible.

9. Not making the necessary security investments

Another one that could seem counterintuitive is that, in some cases, you have to spend money now on IT in order to save money later on. With regard to Computer security, this is never truer.

The data speaks for itself. According to the 2022 Cyber Breaches Study, 39% of UK businesses have experienced cyberattacks, with an average cost of close to £20,000. This demonstrates the need of having effective IT security in place.

Solution

The Cyber Essentials certification is an excellent place to begin. You may have the assurance that your company is meeting a good minimum level of security for just a few hundred pounds by having it evaluated in the five core areas of IT security.

10. Overlapping Solutions

A common way that businesses squander money on technology is by buying a variety of solutions that are similar. When businesses go through acquisitions and mergers and inherit legacy technology, this might happen. It can also happen when departments within enterprises that are dispersed adopt new technology without informing the entire organization.

According to a 2019 survey, businesses spend £11,000 annually per person on SaaS, however, £3,000 of that money is not necessary.

Solution

Companies should undertake routine software assessments that look at the effectiveness of each solution staff members are using in order to lower the expenses associated with overlap. Software for customer relationships and business resource planning, for instance, frequently overlap. Tech administrators can decide which solutions offer the greatest value and which can be deleted when a duplicate is present.

Good solutions don’t have to be expensive – they need to be smart. 

We need to continuously keep the big picture in mind. We are all, in the end, business leaders. The main goal of our work is to make money. Everyone wants cost-effective solutions that work since nobody likes to spend more money than they have to. Nevertheless, as we’ve mentioned before, good IT support isn’t about spending a lot of money; it’s about spending money wisely.

If you need help implementing any of the IT cost-saving measures in your business, Workplace Connect is the perfect partner for you.

We’ve seen what works, and more importantly, what DOESN’T. Learn more and schedule your FREE consultation by calling us at (+44) 020 3633 3182 or emailing us at hello@samuelt48.sg-host.com.