Global IT spending will grow to $5.13 trillion by 2024 , which is about 8.8% year-over-year, with the software segment showing the fastest growth. Gartner's forecasts are very realistic, especially since business is really interested in investing in IT infrastructure. Business understands that speed, stability and quality of service in digital products are important in the eyes of customers and can become an important competitive advantage. In order to control IT costs as efficiently as possible, it is necessary to learn how to properly manage them. I will tell you why it is so important and what you can do in this direction.
Let's start with counterexamples
In the process of scaling the IT infrastructure, the company purchased several servers and data storage systems, acquired licenses, increased the staff of technical specialists, expanded the server room and eventually found out that… moving non-critical loads to the cloud would solve the task ten times faster and two to three times faster times cheaper. Or another situation: you made a mistake with the sizing and now you pay for excess resources in the public cloud.
If in the second device it will be enough to give up excess resources once, then there is no simple solution in the first example. Therefore, I suggest working ahead of schedule now and making IT cost management a routine practice in your company. In a story with a happy ending, this will not only lead to direct savings, but also help increase the profitability of the business as a whole.
Where to start managing IT costs
Let's highlight five steps to spend money on IT as efficiently as possible:
analyze costs and look for where there is an opportunity to reduce funding without affecting the performance of IT systems. formulate clear financial goals and communicate them to all managers and their deputies in the IT department of the company; engage in predictive analytics to think and act at least one step ahead; calculate total cost of ownership (TCO) to clearly understand how much hardware, licenses, systems, technology, migration services, upgrades, maintenance and everything else costs; plan training so that employees can use the technical and software tools available to them as efficiently as possible; make it a habit to control IT costs as part of the corporate culture and an ongoing process that receives sufficient attention at the level of all departments.
How a business can save on IT costs
If the company has at least a small opportunity to optimize its IT expenses, it should do so, because unjustified expenses often grow unexpectedly: today they are still invisible, and tomorrow they already noticeably drag down financial indicators. I have highlighted a few ways that can become your “growth zone” in this matter.
Optimizing the use of cloud resources
Cloud costs in medium-sized businesses grow by 20-30% annually, and inflation is not always “to blame” for this. Most often, the need for additional funds arises at the stage of migration of new applications to the cloud, development and testing of new services, when the number of dev and test servers grows rapidly and often uncontrollably, as well as to pay for unused resources (primarily processing power and storage under already missing data). In this matter, a good place to start is with a monitoring system that will help understand the nature and volume of the load, as well as predict when the current resources will not be enough. Next, you can ensure that the load on virtual machines matches their actual configurations, and that resources for testing and other short-term needs are connected only when necessary, and that virtual machines that are not in use are removed.
Each resource has its own price, but at the same time, for ease of management, some place cold/hot and critical/non-critical data in the same storage. If they are not designed for high speed, you will definitely overpay for services that do not need this speed. And if you place all the data on slower systems, you may encounter slow execution of operations in loaded databases.
In the near future, the rapid increase in costs specifically for cloud services will largely be argued by the increase in workloads created by generative artificial intelligence (GenAI). But if this is not your story, you will get a real opportunity, if not to reduce cloud costs, at least to significantly slow down their growth.
Maximum automation of manual processes
Many of you have heard of the principle “everything that can be automated should be automated”. Most companies have this possibility, but do not always use it – for example, it is quite easy to automate the configuration of servers, configuration management or IT infrastructure in general. There is more and more talk about “intelligent automation”, which allows you to automate low-level tasks to simplify the decision-making process, reduce the risks of influencing the work of the “human factor”, and also start to use computing resources more efficiently. The main components of intelligent automation are business process management (BPM) systems and robotic process automation (RPA) systems. The more processes are performed without human intervention, the more the company has the opportunity to use highly qualified specialists in tasks with a higher priority.
Virtualization of computer systems
This is your way if you plan to use the available computing resources more efficiently. Virtualization will allow you to create exactly the kind of machines that correspond to specific IT workloads, thanks to which you will get rid of equipment that works at half, or even at a third of the capacity.
License management
The SaaS application market continues to grow, which means that companies are increasingly using software as a service to optimize their licensing costs. However, there is a flip side of the coin: a large number of subscriptions is more difficult to manage. This causes duplicates to appear and some subscriptions to become obsolete while the service provider charges for them on a regular basis. It will help to conduct an “inventory” of the SaaS products used by the company in order to leave only relevant and useful ones. It is also important to regularly compare the planned licenses with those actually used. If we take SaaS solutions for sales as an example, then ignoring the update of the number of licenses after the dismissal of an employee can cost additional money.
Implementation of new technologies
At first glance, these are additional costs for the IT department, but do not rush to conclusions. In fact, using outdated technology that doesn't meet current needs often holds a company back. According to the developers, it accumulates technical debt because it puts up with imperfect tools that take up valuable resources to work with. At the same time, they can be spent more efficiently — not on maintaining the operation of old systems and constantly correcting errors, but on the introduction of new, more productive, flexible and secure ones. Yes, the company has to invest a large amount in a short period of time, but at the same time it will be able to reduce IT costs in the long term.