IT cost reduction: best strategies to optimize your budget

4 minutes reading

Despite the optimistic prospects for investments in technology necessary to anchor the accelerated digitization, the requests for budget optimization continue to exert pressure on the managers of companies from the most diverse sectors.

The main reason is that reducing operating costs is undoubtedly one of the company’s central premises of financial sustainability. However, it is too common to neglect this impact on other organizational business units.

For this reason, along with evaluating the drivers of spending, it is necessary to understand how IT spending affects service delivery as a whole and its effect on overall costs and business revenue. And here, it pays to focus on Data Centers, as well as the CapEx and OpEx aspects built into the operation.

Having a specialized partner can be one of the main strategies to optimize the operating budget.

Do you want to know why? Keep reading:

What does optimizing the IT budget mean?

In short, IT budget optimization comprises a series of strategic steps to achieve more with less.

In practice, we know that there is much waste in IT spending. Companies often invest in technologies and tools they don’t need because they are on the rise or as a result of failed tests.

Therefore, considering every business’s objective is to make a profit, it is necessary to ensure that your IT infrastructure provides a proportional value to the investments made in it. To do this, it is essential to eliminate excesses and optimize processes to achieve efficiency in IT spending.

2021 was the year when the world racked up $4.2 trillion in IT spending, according to Gartner, and the numbers are expected to rise by at least 5.5% in 2022.

Statista estimated that global IT industry spending would be approximately $5.3 trillion in 2022. In the same way, the global industry is expected to advance by 2024 with a 5% compound annual growth rate (CAGR).

For this reason, there is no better time for companies to reassess their position on IT spending, determine cost reduction opportunities, and reconsider strategy toward delivering ideal value.

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Reduce costs or budget optimization?

Many people need clarification on budget optimization with cost reduction. However, there is a fundamental difference: while cost minimization can only happen once, optimization is continuous.

So when many professionals say they are optimizing the IT budget, they are simply cutting costs. Since the latter’s effects are short-term, they end up wearing out, and the company returns to the starting point in search of a new cost-reduction measure.

However, when a company optimizes its budget, it is able to structure the budget more assertively to maximize business value. According to an analysis published by Gartner, the savings achieved with this practice can vary between 15% and 20% in the period between 18 and 36 months; the most significant savings can reach more than 25%.

ALSO REED: Data Center redundancy: more security and stability for your company

Data Center management and budget impacts

For many companies, Data Centers represent a large portion of IT investments, whether for equipment upgrades, infrastructure maintenance, or dedicated team payroll.

For example, maintenance expenses such as water, electricity, and cleaning can reach around $200 per square meter for a proper corporate Data Centre structure. Even the smallest ones, approximately 1,500 square meters in size, mean that a new construction project will be challenging to sustain with investments of less than a million dollars.

In addition, land value, market conditions and requirements, among other things, can affect the cost and viability of the structure.

ALSO REED: Understand why Data Center outsourcing can improve your company’s sustainability rates

IT Optimization to Unleash Funds for Digital Business

Traditional cost-reduction efforts can leave organizations ill-equipped to advance their digital initiatives, hurting the ability to grow revenue, build end-customer loyalty, and gain market share.

In this sense, IT optimization services emphasize digital resources’ evolution while mitigating unnecessary expenses.

With this approach, organizations can capitalize on new and emerging digital business models as they meet the efficiency needs of their Data Centers or the company’s budget constraints as a whole.

Data center outsourcing is a strategic way out for budget optimization

Given the critical role Data Centers play in organizations’ digital evolution journeys, it is necessary to re-examine their costs systemically so that the business can determine its readiness for the future.

For this, using shared services offered by specialized providers such as ODATA has been one of the most effective ways of optimizing the IT operating budget. This is the main benefit of hiring a technical partner.

Therefore, by migrating the corporate Data Center to a more modern and scalable remote fabric, such as colocation buildings, cloud fabrics, and perimeter, the spend initially inserted in CapEx is converted to OpEx, allowing for more intelligent budget allocation. 

Do you want to know more about reducing your IT expenses with Data Center services without sacrificing the quality of your facilities?

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