Inflation is biting hard. At 9%, the UK consumer price index is at its highest since records began. That doesn’t just inflate the cost of a pint - it also pushes up the cost of doing business. Expect rising capital expenditure costs as vendors feel the pinch, along with escalating contract and labour costs. What can IT departments do to lessen the pain?
Prioritise your projects
Belt-tightening is a fact of life during an inflationary period, which means cutting discretionary costs and lowering non-discretionary ones. Discretionary projects are the easiest to cut away. Take stock of your IT project plans for the year and determine which are of highest importance. In an ideal world, That should be a simple case of weighing the cost against the projected ROI, but in practice projects might have other considerations.
Revamping your software architecture might prove costly in the short term with no immediate revenue bump, but it might position you to deploy planned business services more quickly, supporting the board’s strategic imperative. You may also find that a particular project sponsor is powerful enough to push their pet project through, regardless of the numbers. This is where an IT governance committee will come in handy.
Audit and consolidate
Now is also the time to consolidate your IT portfolio. How aware are you of your hardware and software portfolio and how individual products overlap? Auditing it will give you a better sense of products that might not need replacing at all. Some products and services might overlap with each other enough that you can combine them, doing away with one of them altogether.
An audit can identify equipment nearing the end of its life such as disparate storage devices or network hardware. Instead of replacing these individually and wasting capacity, you might be able to substitute a single more powerful device that provides only the ports or storage capacity you need.
Software is another area where you can make savings. Audit your usage to see if you’re paying for seats or virtual server CPUs that you don’t need. You can also take this opportunity to consolidate software suppliers by identifying applications that overlap in functionality. It might be possible to do away with an entire set of licenses altogether.
Take a similar approach to cloud services by looking at your software as a service (SaaS) usage. If you’re using the cloud for infrastructure or platform services, now’s the time to review your costs and look for service provider savings.
Extend replacement cycles
Consider extending refresh cycles on some of your hardware. Could desktop PCs stand some repair, and would this be cheaper than ripping and replacing? How easy are your laptops to upgrade with new components? Squeezing another year or two out of your devices and data centre hardware could save you enough time for prices to adjust in the medium term.
Assess market prices
When IT suppliers start raising their prices, it pays to compare their price hikes with similar products from other vendors to identify any disparities. You might find that some vendors passing on more costs than others.
Work with a third party
A trusted procurement partner will be invaluable when assessing the vendor landscape. Having an IT services provider who maintains strong relationships with multiple vendors and focuses on getting you the best price can help you weather this financial storm.
Our IT marketplace gives you access to over 2,500 suppliers, giving you direct access to catalogues from your own software. We help you manage spending limits and approvals to control your costs, while saving you money with personalised discounts.
It’s hard to feel in control when macro-economic conditions put dents in your budget. Nevertheless, third-party expertise and judicious IT governance can minimise the damage. Do it right, and you might emerge from this inflationary period sporting a healthier IT budget than you began with.