CIOs are responsible for the performance of their company’s network infrastructure and for getting the most value out of each IT asset.
But as technology infrastructure budgets tend to be flat, CIOs are facing ever-increasing pressure from staff and execs to do more with fewer resources.
So before big budget cuts get made, now is the time for smart CIOs to inform senior business and IT execs which factors drive up IT costs, and partner with them to make changes for balancing cost reduction and innovation. Here are four ways to reduce IT costs more effectively:
Reduce, reuse and recycle – Squeeze more value from pre-owned network equipment. Utilize new servers and switches in production systems and refurbished equipment as the secondary/fail over systems. To maximize cost savings, get a full warranty on refurbished servers by purchasing through a manufacturer-sanctioned program, and when the factory warranty expires, add the server to a support agreement.
Encourage best practices – Make enterprise report dashboards each manager can use to: monitor employee software usage productivity, see trends in usage of the company’s expensive software license assets, document shortages, and uncover training needs. Analysis of workflow patterns can help you provide support and improve work processes, to help software users perform more effectively.
Establish accountability through IT chargeback – Maintain a level of consistent communication with an accounting liaison to ensure compliance, and see if some IT budgets can be pushed into other departmental budgets.
Implement fair and reliable chargeback mechanisms for ongoing measurement, analysis and reporting to see which assets are in use and what they cost, for better valuation of IT services. This is crucial for IT execs who are working with a large and complex environment, where they handle growing, heterogeneous mix of hardware and software.
Renegotiate software contracts – Take advantage of contract renewals. Apply for additional incentives. Revisit those contracts that charge a fixed enterprise fee, and see if the provider can charge based on actual usage instead.
Accurate metering and usage reports can enable IT managers to negotiate with their service providers/software vendors, so they can adjust contracts to match the documented usage of their software licenses by using pay-per-use agreements.
In a recent issue of Information Technology Asset Knowledge magazine, Signe Marie Stenseth, Open iT Senior VP wrote, “With pay-per-use based agreements, you may need to introduce a high and a low usage watermark, to protect both you and the provider, but you will still benefit from a far more flexible agreement instead of traditional rental or perpetual agreement offers with fixed number of users or applications[i].”
Reducing IT costs doesn’t necessarily mean chopping away expenses. Understanding how IT assets are being used offers a more effective approach to cost-cutting. With these four cost-saving measures, CIOs can look deeper into the business value of their IT resources, to plan better and implement smarter utilization of the company’s IT assets, and help business colleagues do the same.
Schedule a demo, and learn more on how you can future-proof your IT budget with Open iT software asset management tools. Start reducing IT costs today.
[i] Stenseth, Signe Marie. “Business Value From Metering Software Usage.” Information Technology Asset Knowledge October 2011: 105-108.