UK inflation stayed in double figures at 10% in March, with the likelihood that the Bank of England will consider raising interest rates. Pressure on the economy continues to be driven by a range of issues from depleted gas supplies in Europe to semiconductor shortages in Asia. The conflict in Ukraine has significantly impacted gas prices as well as essential car parts and agricultural commodities, such as grain and sunflower oil. The recent announcement by the European Commission to phase out EU imports of Russian oil could also increase prices in other markets the UK uses, such as Norway and Qatar.
Unsurprisingly, all businesses will look to reduce costs and position themselves to ride out a downturn.
IT leaders should be able to demonstrate rational cost cutting while maintaining services, and still position the technology function of a business to take full advantage of future innovation.
Here are four strategies to do that.
1. Go Public
Many businesses still run on-premise data centres or use private cloud solutions, however a strategic move to public cloud can reduce costs as well as increasing operational efficiencies.
Large public cloud providers have a vested interest in supporting your firm’s cloud migration strategy. Expert assistance either directly from the cloud provider or from one of their managed service partners coupled with financial incentives, can reduce upfront costs, and accelerate other operational and budgetary efficiencies.
Public cloud economies of scale allow providers to offer their services at a lower cost than most businesses can achieve on their own. In addition, public cloud allows businesses to run applications at much higher densities, which leads to further cost savings.
2. Best of Breed SaaS
Software as a Service gives businesses access to a plethora of systems and utilities that would otherwise be beyond their financial or operational capacity.
Which systems should be outsourced? All line of business systems should be considered, this includes HR systems, financial systems, CRM, VoIP telephony, collaborations solutions, and facility management solutions to name but a few. Businesses may take a view on bespoke or highly critical systems and choose to keep these inhouse, but that doesn’t exclude moving them to a cloud infrastructure environment for greater resilience and scalability.
Take a best of breed approach to outsourced and SaaS solutions by selecting the best fit for your business. Prudent selection should reduce cost either directly or indirectly through increased efficiencies.
3. Ramp up Remote
It took a full global pandemic and a seismic shift in business management mentality to accept and then exploit the advantages of remote work forces, with most businesses settling on a hybrid model.
Remote working models need more than just good technology; appropriate governance, processes and a supportive corporate culture can take full advantage of remote teams, and geographically dispersed skills and resources. Cost efficiencies include reduced office space, “follow-the-sun” strategies, and a capacity to flex for additional or temporary teams.
4. Slim Down
Over time it’s often the case that a business will have partnered with multiple vendors, some of which provide overlapping or even in some cases duplicate services. Just the effort of managing multiple providers and contracts uses up internal resources. A thorough review of contracts and services, combined with a potential reduction in vendors should decrease costs. Also consider that your buying power is increased when spread across just a few critical technology partners.
These four strategies not only drive down technology costs, but they also position your business to take advantage of innovations and tech developments in the future.
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