In today’s competitive business landscape, managing IT support costs while maintaining high-quality service is a challenge many companies face. But don’t worry – it’s not like trying to square a circle.
With the right strategies, you can significantly reduce expenses without compromising on the quality of your IT support. Let’s explore some effective approaches to help you achieve this balance.
What Are “IT Support Costs” Anyway?
Some of us might not even know what the heck IT support costs are – and we don’t blame them, talk about a nebulous term!
IT support costs are pretty simple, they’re basically just “in-house IT costs,” but as with everything IT, it sounds cooler when it’s fancier. IT support costs are what your business pays for in-house IT service management.
Here’s your common buckets of IT support costs for businesses of any size:
- Hardware and infrastructure maintenance
- Software licenses and updates
- Staff salaries and training
- Cloud services and data storage
- Cybersecurity measures
- Network management
According to recent studies, in-house IT support can cost between $150,000 to $200,000 annually. That’s enough to make any CFO break out in a cold sweat. This significant expense highlights the importance of finding ways to optimize IT support costs without sacrificing service quality.
Strategies to Reduce IT Support Costs
1. Embrace The Cloud
It’s here. We have to embrace it. Migrating to cloud computing can significantly reduce costs to businesses by eliminating the biggest IT expense: on-site infrastructure. Cloud solutions offer tons of benefits for businesses:
- Scalability to match business needs
- Reduced hardware maintenance costs
- Improved accessibility and collaboration
- Pay-as-you-go pricing models
A study by Deloitte found that 78% of businesses consider outsourcing as a cost-cutting tool, with cloud services being a primary focus.
Most Effective Cloud Solutions for Cost Reduction
- Migrate workloads to the cloud: Most cloud providers use a pay-as-you-go model, so you only pay for resources you actually use.
- Optimize cloud usage: Regularly assess your cloud infrastructure costs and architecture. Use auto-scaling to deactivate resources during low activity periods.
- Leverage cloud cost optimization tools: Tools like Spot by NetApp can help optimize costs through spot instance automation and provide cost breakdowns.
- Use reserved instances and savings plans: These can provide discounts of up to 75% compared to on-demand pricing for predictable workloads.
- Utilize spot instances: These can offer discounts up to 90% off on-demand pricing, though they require careful management.
- Implement FinOps practices: FinOps provides a framework for maximizing cloud investments, helping eliminate unnecessary cloud usage and streamline services.
- Consolidate and standardize cloud services: Reduce the number of cloud providers and services to benefit from economies of scale.
Implement cloud-native design: Design applications to take full advantage of cloud scalability and cost-saving features.
Check out our article on how to develop a cloud migration strategy for your business for more detail on…well, how to develop a cloud migration strategy for your business.
2. Automation For Your Business
We’ve covered the cloud, and now onto the other cool kid in the room: automation. This isn’t really new – mainstream business automation tools have been around for a decade or more now. Automation is a useful tool for streamlining tasks, improving efficiency, and reducing labor costs. Areas where automation can be particularly effective include:
- Data entry and management
- System updates and patches
- User account management
- Routine maintenance tasks
By implementing automation, companies can save up to 3% of their IT budget. Which, sure, doesn’t sound like a lot, but any savvy business owner knows – 3% is 3%.
3. Outsourced IT Services
As managed service providers ourselves, we have to admit, we’re a bit biased. However, outsourcing IT support – or even just pieces of your IT puzzle, like cybersecurity – is almost certainly more cost-effective than maintaining an in-house team. And there are genuinely very few downsides.
A few of the benefits of outsourcing your IT:
- Access to specialized expertise
- Reduced staffing costs
- 24/7 support availability
- Scalable services
Research shows that companies can experience IT cost reductions of 25-40% by outsourcing services. That’s a pretty hefty chunk of change you could be saving.
4. Declutter Your Technology Stack
Do you really need that SaaS platform? What about that Unreal Engine subscription?
Evaluating and consolidating your technology resources can lead to significant cost savings. Here’s just a few places to start:
- Eliminate redundant software
- Consolidate vendors
- Standardize hardware and software configurations
- Leverage free, open-source solutions where appropriate
Think of it as Marie Kondo-ing your tech – if it doesn’t spark joy (or productivity), it’s time to let it go.
5. Implement a BYOD Policy
Bring Your Own Device (BYOD) policies can lead to substantial cost savings. Studies reveal that companies save up to $3,150 per employee per year with BYOD. Benefits include:
- Reduced hardware costs
- Lower device management overhead
- Decreased maintenance expenses
Be wary, though – BYOD can lead to a significant increase in cybersecurity breaches.
6. Renegotiate Contracts and Licenses
Regularly reviewing and renegotiating contracts with service providers and vendors can lead to significant savings. Strategies include:
- Bulk discounts for long-term commitments
- Consolidating services under fewer providers
- Exploring alternative pricing models
Companies can potentially reduce current fees by 10 to 30% on average through contract renegotiations. It’s time to channel your inner dealmaker and get those costs down.
Managed IT Services – Scalable IT Solutions
As Sam Gamgee once said to Frodo Baggins, in one of his darkest hours within the mottled gates of Mordor: “Share the load”.
Sam, of course, was referring to the One Ring, but the same principle holds true for IT: you don’t need to carry the burden of managing an entire business’ IT infrastructure alone.
Nowadays, managed IT service providers like ourselves can basically handle anything your business can throw at us – at a fraction of the cost it would take you to do yourself. The average cost to outsource IT support ranges between $80 and $150 per month for a single user.
The true value lies in the expert ability and experience that a managed service provider offers – giving you the strength of a whole team of learned IT wizards for only pennies on the dollar.
In 2024, it’s become a no-brainer for businesses of all sizes. We really do help businesses find that “peace of mind” that comes with knowing your baby is in good hands, technologically speaking.
Case Studies of Successful IT Cost Reduction
Case Study 1: Autodesk
This strategic decision led to several significant improvements:
- Reduced Time for Updates: The time required for installing and deploying service packs decreased from weeks or months to just a few days, ensuring systems were always up-to-date and secure.
- Improved Compliance: The third-party provider implemented robust processes to ensure all of Autodesk’s systems remained compliant with industry regulations, reducing risk and improving the company’s reputation.
- Significant Cost Savings: Autodesk achieved a reduction of over 40% in their annual support fees, freeing up resources for core business activities and innovation.
- Enhanced Focus on Core Business: With routine maintenance tasks handled by the outsourced team, Autodesk’s internal IT staff could focus more on strategic initiatives and projects.
Case Study 2: Stillwater Mining
Stillwater Mining, a palladium and platinum mining company, faced a significant challenge when their enterprise software vendor announced a six-fold increase in support fees for their JD Edwards EnterpriseOne system. By switching to third-party support, they achieved:
- Substantial Cost Savings: Stillwater Mining reduced its annual support costs by 70%, amounting to savings of over $1 million per year.
- Maintained System Stability: The third-party provider maintained and even improved system stability, resulting in less downtime and improved productivity.
- Avoided Forced Upgrades: The company was able to continue using its current, stable version of the software without being forced into unnecessary upgrades.
- Improved Support Quality: Stillwater Mining reported faster response times and access to senior-level support engineers who could quickly resolve complex issues.
- Enhanced Customization Options: The new support model provided flexibility to customize their JD Edwards EnterpriseOne system to better fit their specific business needs.
Go Ahead And Get to Reducing!
In general, it’s always good to reduce, and reducing IT support costs without sacrificing quality isn’t just a pipe dream – it’s totally achievable with some smart planning and the right tools in your arsenal. By embracing cloud technologies, automation, and managed services, businesses can optimize their IT expenses while maintaining high-quality support.
Remember that the goal is not just to cut costs, but to align IT spending with business objectives and value creation. As technology continues to evolve at breakneck speed, staying informed about new cost-saving opportunities and regularly reassessing your IT support strategy will be crucial for long-term success.
By implementing these strategies, you’re not just cutting costs – you’re setting your business up to be more agile, efficient, and ready for whatever curveballs the future might throw your way. So go ahead, give these ideas a whirl, and watch your IT budget (and your CFO) thank you!