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Ministry of Defence BT Inmarsat Science & Technology Facilities Council

How to be realistic with your IT budgets

In a time of economic instability, it’s imperative that non-negotiable budgets are set and cost reductions take place. In a department that focuses on IT, it is generally believed that costs are going to be significant; computers and technology aren’t cheap. Having innovative solutions in an already innovative department is crucial and a task that IT professionals face on a daily basis.

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An IT department needs, to coin a phrase, keep up with the times; in today’s deeply competitive business environment, the department must ensure that it drives speed and agility.

Cost reduction generally begins with IT for obvious reasons. A conspicuous significant cost, when you’re trying to conserve money, it’s often the IT department that’s first targeted.

Whilst the department is viewed as a huge drain on resources, this particular department drives a business with ground-breaking technology that can completely transform how a business operates short-term and long-term.

Potential cost-effective tools and technologies are formulated by the IT department. Said tools and technologies can provide cost reduction business wide. To give a name to one of these tools quickly rising to prominence, we can now all appreciate the importance of cloud computing to a business and cost reduction.

Despite those responsible for cost reduction targeting the IT departments first, this is just one example of how necessary the department is; the example, cloud computing, can drive down costs in not only the IT department but the entire business.

Despite cloud computing exemplifying the importance of just one tool managed by the IT department, you ultimately still need to be able to reduce costs and IT is still one of the more expensive department.

It’s important for a CTO to assess the situation to see where costs can be cut most efficiently without directly affecting the employees in the IT department. There’s no set group of costs that can be cut quickly, it’s going to be different for every business. Despite this, there is some steps that a CTO can take to have an immediate influence on costs.

Emphasising project spending, the CTO can review licence and procurement spending as well as reducing supplier costs through various strategies such as renegotiating service level agreements and vendor consolidation.

The focus whilst reducing costs should be greater control and cohesion with the other elements of the business, therefore creating efficiency business wide to save costs not just in IT but every department.

The best approach is to modify the IT department so that it does more for less or with less such as consolidating, centralizing and standardizing servers, storage and databases. Increasing usage of the cloud and automated systems to do ‘basic’ tasks can save money as individuals or a team will not have to do the tasks any longer.

Encouraging departments and staff in general to collaborate can get tasks and projects completed in a timelier manner, therefore saving funds that would have been spent on previously longer projects.

When cost cutting, it’s crucial that you don’t decrease productivity but also improve it. Ensuring that you don’t affect morale or cost reduce by cutting money to crucial tools means that productivity will stay the same at the very least. By getting departments and staff to cooperate, you can increase productivity above previous levels whilst still creating efficiencies.