Cost-conscious managers and business owners are often shocked at the amount of money their companies pour into their information technology departments. The unfortunate reality is that IT is a necessary operating expense that rarely adds to the bottom line for most businesses. However, there are several ways you can reduce your IT service costs while improving the quality of your systems. In this article, we will introduce you to several cost-saving options that you may not have considered.
Why You Need an IT Budget
There are reasons that information technology is one of those budget items that can quickly spiral out of control. With the rapid pace of technological change, your physical equipment and the software you use need frequent updating and replacement. Otherwise, your systems could experience slowdowns and interruptions, compatibility issues, threats from outside parties, and susceptibility to data loss. There’s a reason that you’ve automated your information systems — they help your company operate more efficiently — but that doesn’t mean you have to allocate an unlimited amount of funds to them. With that in mind, your IT budget should include allocations for:
Hardware
Maintenance
Software
IT Projects (Upgrades, cloud migration, etc.)
IT Training
Emergencies
Knowing your anticipated expenses can not only help you prepare for expected and unexpected costs; it can help you eliminate redundancies and identify waste.
Easy Ways to Quickly Reduce IT Costs Without Jeopardizing the Company
It’s important to be careful when it comes to setting expense limits. Overcutting can make your company vulnerable to slowdowns, stoppages, and attacks. Here are a few proven ways to reduce your company’s IT expenses.
Perform an Internal Audit of Your IT Budget
Assuming you have an itemized IT budget, you should conduct a review of each item. Most expenditures will, of course, be necessary, but it’s difficult to know without a review.
Evaluate the Necessity of In-House Staff
Overstaffing any department can place a substantial strain on your budget, but with the premium that employers pay for technical expertise, this can be especially true when you have too many information technicians. If you have an in-house IT department, there’s a likelihood that your IT manager brought on temporary staff for a project and decided to keep them on. One way to avoid overstaffing your IT department is to outsource its responsibilities.
We will explore this option in the next section.
Use a Managed Service Provider (MSP)
Outsourcing your IT services to a managed service provider (MSP) can significantly reduce expenses. In order to compete, MSPs must cut down costs. That means they allocate the resources necessary to run their clients’ businesses, and those cost-savings are passed along.
Hire an MSSP for Security Matters
Even if you are reluctant to involve an outside company with your information technology, you should consider outsourcing the information security for your firm to a managed security services provider for the following reasons:
Most in-house IT departments lack the specific training to provide professional cyber-security.
Avoiding even one attack can save your business from financial ruin. The average cost of a data breach in 2021 was $4.24 million.
Top-tier MSSPs are staffed with certified cybersecurity experts who receive updated training and briefings with the latest cybercriminal tactics.
Business Cost Benefits of Having an Outsourced MSP
Many companies are reluctant to outsource their data management services until they realize the positive impact it can have on their business budget. Here are some of the ways that hiring a managed service provider to run all or part of your business IT services can impact your bottom line:
Flexible Resource Allocation
If your business fluctuates seasonally, you already realize how costly it is to budget around your busiest times. For instance, if you need 20 workstations during your most profitable times, you’re still going to have those workstations during the slow periods. The same can be said of staffing, data plans, etc. An MSP helps you avoid incurring peak expenses during slower periods. They can help ensure that you only pay for the resources you need when you require them.
Technical Expertise Around Purchases
MSPs must stay abreast of the latest technological advances and the performance capabilities of different products coming to the market. Your MSP should be able to help you take advantage of cost-saving new tech and to avoid premature upgrades.
Risk Assessment
Protecting your data is a primary function of business IT support services. If your data is compromised, you could experience interruptions in services, damage to your business’s reputation, and the loss of irreplaceable intellectual property. An MSP/MSSP can audit your systems, help you create security protocols, and train your employees on cybersecurity. They can also help you develop a backup system and a disaster contingency plan.
Cloud Management and Migration
Cloud storage is often cheaper and more efficient than onsite servers. An MSP can help you safely migrate to the cloud without interruption in your services.
FAQs About Managed Service Providers
If you’re considering outsourcing your business’s IT systems to an MSP, you’re bound to have concerns. The following are some of the most frequently asked questions about IT spending reduction via MSPs.
Are All MSPs Managed Security Service Providers?
No, and that’s an important distinction. Many MSPs are also MSSPs, but not all. If you are entrusting a company with your cybersecurity, make certain that they have the proper certifications, experience, and training.
Would I Have to Let My Entire IT Staff Go?
Not necessarily. Many businesses decide to outsource a portion of their business IT systems and retain a portion of their staff. Ultimately, management should decide the proper allocation for their business.
For more information about reducing IT expenses, contact the professional IT and cybersecurity professionals at Flagler Tech. Our friendly, professional staff can help outline a plan that meets your IT and security needs. Call Flagler today.