According to the latest forecast by Gartner, worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.3 percent from 2017 estimated spending of $3.5 trillion. In a recent Tech Pro Research survey, respondents reported that their organizations will be prioritizing spending on security, cloud services and hardware in 2018.
While we see an overall increase in spending on IT, businesses are still facing pressure to keep those costs under control. Tight budgets and skills shortages are among IT’s top challenges according to InformationWeek’s Top 10 Challenges IT Faces Heading Into 2018.
While many organizations have already reduced CapEx spending on hardware in their data centers through virtualization and the adoption of cloud computing, they are still finding that the IT department is consuming too much of the overall budget and often don't have clear visibility into where that money is actually going. IT is viewed as the black box, where no one can explain where the budget is being applied. That said, implementing new technologies and services is essential for businesses to survive today, and if costs aren't well under control companies can lose focus on innovation and potentially get left behind their competitors. Ways to reduce IT costs and give administrators more time to add value to your business include:
- Prioritize. The first step to optimize and shrink your IT budget is to prioritize spending. This means various teams within the organization are sitting down with management and going through budget line items one by one to determine exactly what you can do without and identify which items are most important to the business strategy as a whole. To make this process successful, you should assign individual items to the person most knowledgeable about how the technologies and processes work so that they can provide the most informed insight to the advisory committee.
- Cloud. By moving workloads to the cloud, you can: eliminate CapEx on physical infrastructure; pay only for the resources that you use; reduce operating costs for services such as air conditioning, electricity, and support contracts; and reduce costs on expensive employees required procure, configure and manage an on-premises data center. Cloud providers can also scale resources up or down as needed without you having to invest in excess capacity that often ends up being under-utilized. Further, by leveraging virtualization, container, automation and micro services technologies the cloud provides, you can consolidate infrastructure and centralize management.
- Automation. By implementing automated frameworks, you can reduce the time and money it takes to manually configure and manage your data center infrastructure, software, and data. Automatable tasks include job and process scheduling; workload and service configuration and provisioning; system, workload and application performance monitoring and alerting; ongoing maintenance, patching and updating; application delivery; and, on-demand resource scaling.
- DevOps and agile. Breaking down the traditional silos between business strategists, developers, and operations teams with collaborative and agile DevOps frameworks can help you increase time-to-market with applications and services. The Agile DevOps approach also enables businesses to roll out updates and bug fixes and recover from any systems issues faster, and achieve lower failure rates overall.
- Consultants and contractors. Finding people with the right skills and expertise to implement the best business processes, practices and technologies can be extremely difficult and expensive. Many businesses simply don't have the resources to attract, retain and continuously train FTEs to achieve the true IT transformation required to stay on top of the game in a today's fast moving and super-competitive world. By working with outside consultants and contractors with specific expertise and on a project-basis, you will be able to reduce your IT budget quicker and with more efficiency.
- Managed Services Providers. "IT organizations are committing to outsourcing this year at the highest rate since the Great Recession" according to a recent article published in the Data center Journal. Engaging with a Managed Services Provider allows organizations to rapidly implement best practices, structured and efficient processes and leading edge technologies, and also leverage deep technical expertise. This, in most cases, will not only reduce cost in the long term but also right from the beginning of the engagement. Ultimately, this model enables the organization to focus on its core business, leaving the IT management to the experts.
While global IT spending is on the rise, almost 50 percent of that will be done by larger enterprises that have more resources to fund big and expensive projects than their small- to medium-sized counterparts. That said, businesses of all sizes simply must make the digital transformation to survive in today's rapidly evolving technology and services landscape. However, managing ongoing IT costs will surely be difficult as business needs and budgets are always changing. That's why working with a managed service provider with expertise in the latest technologies, best practices and processes can actually be your best option to keep IT costs under control and enable your in-house IT team to focus on adding more strategic value.