This blog from Celerity highlights the growing need for and utilisation of IT managed service providers and the advantages this can bring.
IT plays a pivotal role in enhancing productivity and competitive advantage. From streamlining operations to enabling efficient communication and data management, IT has become the lifeblood of modern business as today’s digital landscape rapidly evolves.
Unfortunately, the benefits of this technology-driven world come at a price and one of the most pressing challenges facing businesses is the soaring cost of IT; several key factors contribute to high IT costs, including the constant demand for cutting-edge hardware and software, the need for specialised IT expertise, and the relentless pursuit of innovation.
The job of senior IT staff, whether a Technology Manager, IT Director, or a Chief Information Security Officer, has never been tougher. In the current economic environment, budgets are being slashed left, right, and centre. It’s becoming increasingly difficult to optimise IT infrastructure whilst remaining on top of costs, but it’s still going to be the decision maker’s neck on the line if something goes wrong.
Why are IT costs so high?
IT has always been expensive, but there are a number of key factors behind the high costs, which include:
Rapid technological advancements
The IT industry is one of the world’s most innovative sectors. New hardware, software, and technology now evolves and improves at a never-before-seen rate, and business often feel the pressure to keep up with the latest upgrades. This leads to frequent investments in new, and expensive, IT solutions.
Infrastructure and equipment
It requires substantial capital investment to build a robust and effective IT infrastructure, with the associated costs of servers, networking equipment, data centres, and storage systems quickly piling up. When you factor in upgrades and maintenance, the costs can end up eye-watering.
IT requires one of the most diverse, and skilled, workforces across an entire business; an effective IT team requires analysts, managers, technicians, engineers and more. Skilled and experienced IT staff are in extremely high demand – and to make life easier, there’s a shortage of them. It’s incredibly difficult to fill vacancies and when the perfect candidate is found, they aren’t cheap, with IT staff being some of the highest paid within an organisation.
Cyber criminals are constantly evolving their attack tactics, meaning that businesses need to evolve with them. Tying into rapid technological advancements, organisations have to constantly evolve and upgrade their security measures in order to safeguard their critical data and assets. The costs of these upgrades are high, but pale in comparison to the consequences that result from non-compliance, or even worse, a successful data breach. Any downtime that results from a cyber-attack will have significant financial knock-on effects.
Commercial software applications will, more often than not, come with license fees which can be substantial, especially if the software is enterprise-level. Software maintenance, updates, and support contracts only add to these costs.
Integrating different IT systems, and ensuring seamless interoperability, can be complex and costly as the customisation, integration, and testing processes demand significant resources, time, and financial investment.
How can you reduce IT costs?
So, there are a lot of different ways in which IT and security costs can easily pile up. Fortunately, there are also a number of ways to mitigate these.
Long term planning
Carefully analysing the organisation’s IT needs, and providing a clear roadmap for technology investments and optimisations that’s aligned with strategic objectives, enables informed decision making about which technologies to adopt, upgrade, or retire. This clear roadmap will also reveal any cost saving opportunities through strategies such as tool consolidation or cloud optimisation, and will prevent reactive, ad-hoc spending. In short, a long term plan enables a business to make strategic IT decisions that support the organisation’s long term objectives, whilst also staying on top of costs in the face of rapid technological advancements.
Optimising software licences leads to significant cost savings, primarily by eliminating unnecessary spending. Regular auditing allows businesses to identify where they are either not using, or under-utilising, their software licences. As previously mentioned, software licences can be extremely costly, and therefore by eliminating unnecessary spend or reallocating resources to areas of the business that need them, organisations can avoid paying for expensive software that provides little value.
IT asset management is another practical way for businesses to make significant cost savings. It provides businesses with greater visibility and control over their IT resources, with a systematic approach to tracking, monitoring, and optimising IT assets. Similar to licence optimisation, it avoids unnecessary spending, ensuring that the business only invests in the technological resources that it requires. It prevents hardware overprovisioning, extends the lifespan of IT equipment through maintenance planning, and enhances productivity, compliance, and risk management whilst also promoting cost-efficiency. Asset management is a crucial practice for any organisation looking to optimise its IT costs.
Cloud optimisation brings cost savings across a business’ entire IT infrastructure, but it’s biggest value is how it opens the door for more scalable, flexible, and automated IT operations. An organisation that optimally employs a cloud-based infrastructure is able to dynamically scale its operations up and down depending on the requirements at the time. This prevents the costs associated with underutilisation and overprovisioning, ensuring that resources are being used to their maximum efficiency.
The other key benefit of cloud optimisation is the removal of the need for physical, on premise equipment such as servers. Managing and maintaining dedicated servers is a costly business operation, requiring significant human and financial resources. Physical equipment is expensive: repairs and upgrades are costly, and the highly skilled professionals required for hardware maintenance are in high demand and short supply – meaning that they command highly competitive salaries. Servers also consume vast amounts of electricity, requiring 24/7 power, and with today’s energy prices the resulting bill is not insignificant.
An optimised cloud strategy mitigates much of the cost of owning and maintaining physical storage solutions, and allows an organisation to scale its needs up and down with ease.
Utilise a managed service
Outsourcing IT operations to a third-party managed service provider is an extremely powerful tool, in terms of both operational value and cost-reductions. Businesses that use managed service providers are able to benefit from predictable costs that facilitate easier budgeting, without sacrificing efficient operations, scalability, and maintenance. The IT skills shortage is also greatly mitigated, as organisations gain access to teams of highly skilled experts with expertise across all areas of an IT infrastructure – the further reduces costs, in both payroll and training.
Managed service providers enable businesses to gain access to the latest technologies and the associated benefits, and it enables organisations to leverage these in their core business operations without having to find the money to purchase them outright. In short, managed services enable organisations to improve the productivity and efficiency of IT operations, whilst being able to significantly reduce their IT costs.
To find out more, get in touch with Celerity.