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Are you spending too much on IT operating costs?

by John Lane - Oct 25, 2016

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The world of IT is developing at a rapid pace. It can be difficult for CFOs and business owners to know if they’re spending the right amount on their tech or if they’re being taken for a ride. In this article, we’ll highlight not only how to ensure that you’re not overspending on your IT, but that you’re choosing the right IT for your company.

Here are a five red flags that show you’re spending too much on IT operating costs:

1. You don’t know what your IT requirements are to begin with

The most effective way to unnecessarily inflate operating costs is not knowing what you should be spending your budget on in the first place. Your company should have an IT strategy that matches and complements your business strategy. This strategy should outline your IT goals in a way that guides your expenditure and makes it easier to track whether you’re getting the most bang for your buck.

2. Your technology is out of date

Maintenance costs far outweigh the cost of investing in new technology, not to mention you’re missing out on increased productivity and efficiency. But another, more nefarious cost comes as a result of new technology being implemented without proper integration with the older underlying system. This can slow your entire system and reduce its effectiveness. Investing in scalable technology like cloud hosting is a great way to build your IT system from the ground up to avoid your older tech holding you back.

3. You're spending a lot on systems and staff that you barely use

One of the primary benefits of technology is that you can do more with less. This is the entire ethos behind the lean methodology, and is an important approach for any modern business. But if your IT operating costs are bloated with tools and personnel that your business doesn’t need, then it undermines your entire financial strategy and wider business goals.

4. You don't understand your IT system’s ROI

Even if you know that a certain IT investment is good for the business, it’s important to know exactly how it adds value. Your financial planning should account for the expected and actual ROI of your IT system. This will inevitably be easier with communication and transparency between IT and finance departments, so encourage a culture of collaboration and teamwork. Knowing how to measure your IT ROI will help you make more informed and effective IT finance decisions.

5. Your best people are doing grunt work

One of the defining features of an inefficient and wasteful IT department is when your highly qualified IT professionals spend countless hours on low-level tech support, maintenance and user error. Your IT manager and CTO have more important things to do than play the role of a company-wide tech help desk. It’s frustrating for them and increases your IT operating costs by stopping them from fulfilling their strategic role. You’re paying a high-end tech salary for someone to do basic tasks that could easily be taken care of through IT outsourcing.

PowerNET knows a thing or two about helping you get more from your IT infrastructure and reduce your operating costs. For a free diagnostic of your current IT processes, take our I.T. health check.

TAKE OUR I.T. HEALTH CHECK

TAGS: it strategy