In today’s ever more digital world, creating – and sticking to – an IT budget is a bit of a challenge.

Yet, many companies find themselves weighed down by unnecessary IT costs that inflate their spend and drain their resources. This blog reveals the often-overlooked areas of overspending in IT departments and ways to stop constantly rising costs. From software licensing to the maintenance of outdated systems, we’ll explore actionable strategies and insights to ensure your IT budgets are inline, and investments are driving value rather than unnecessary expenses.

Common Areas of IT Overspending

Licensing and Software Expenses

One of the most significant areas of potential overspending is in your software licensing. In fact, Cisco revealed that businesses can overspend by up to 30% on unused or redundant software licenses.

Businesses often purchase more licenses than necessary or fail to fully utilise the ones they already have. Additionally, companies might stick with their usual software solutions out of habit, ignoring alternatives that may be more cost-effective, or simply more suitable for their organisation. It’s vital to regularly review your licensing agreements and software usage to ensure they align with your actual needs. Getting better visibility of your software estate can help you consolidate licenses or eliminate unused resources, potentially saving you a significant portion of your IT budget.

848 offers both software license reviews and software asset management (SAM) services to help customers get more out of their IT budget.  Through our licensing services, we can typically help reduce  Total Cost of Ownership (TCO) by 25%.

Maintenance of Outdated Systems

Another considerable drain on your IT budget could be your legacy systems. According to a study by Google Cloud, maintaining outdated or unsupported systems can be 60% more costly than investing in new ones.

While you might think you would spend less sticking with what you’ve got, the time, money, and resources required to maintain old systems and fix issues often outweighs the cost of upgrading. Investing in newer technologies can lead to long-term savings through increased efficiency, better security, and lower maintenance costs.

Inefficiencies, Downtime, and a Lack of Optimisation

Even a relatively small amount of downtime per year can lead to substantial financial losses. Microsoft found that an average of 13 hours of downtime could result in losses up to $10,000 (£8,000) for small businesses.

In many cases, businesses can see IT costs rise, not because of the tech they have, but because of how they use it. Poor resource allocation, such as overprovisioned servers or underutilised cloud services, can lead to significant unnecessary expenses. Regularly auditing your IT infrastructure to ensure it’s optimised for your current needs is essential for keeping your IT budget under control.

Effective IT Cost Assessment Strategies

Conducting Regular IT Audits

The first step in assessing your IT budget effectively is to conduct regular IT audits. This involves a comprehensive review of all IT assets, licenses, contracts, and services to identify what you have, what you’re actually using, and what it’s costing you. Such audits can uncover redundancies, underutilised resources, and opportunities for consolidation or cost-saving.

Utilising Usage Analytics

To truly understand where you might be overspending, turn to usage analytics. Tools and platforms that offer insights into how your IT resources are being used can pinpoint inefficiencies and areas of waste. For example, analytics can show if certain software features are underutilised or if some services can be scaled down without impacting operations.

Learning from Industry Leaders

Leveraging insights from industry leaders can provide valuable benchmarks and best practices for IT spending. For instance, previous blogs and eBooks from the 848 Group highlight the importance of aligning IT investments with business objectives and adopting strategies for cost-effective solutions that help you enhance IT efficiency and regain control of your IT budget.

Implementing Continuous Monitoring and Optimisation

Finally, effective IT cost management is not a one-time activity but a continuous process. Implementing systems and processes for ongoing monitoring and optimisation of IT resources ensures that your IT budget is always aligned with your business needs and market changes.

If you lack the resources for ongoing IT monitoring and optimisation, consider partnering with a Managed Service Provider (MSP) to manage this for you. A key benefit of partnering with an MSP is the potential for considerable IT cost savings which would also help your IT budget in the long run. According to a study by ServiceNow, collaborating with MSPs can lead to up to a 40% reduction in IT expenses. Partnering with an MSP isn’t just about offloading IT tasks – it’s about leveraging the expertise and resources of a specialised provider to drive business success.

Regain Control of Your IT Budget – Reach Out or Read More

By identifying common areas of overspending and adopting a strategic approach to assessing your IT costs, you can ensure your IT investments are both efficient and effective, achieving a balanced IT budget that delivers value.

At the 848 Group, IT efficiency and cost-effective solutions are our thing.

Book a free consultation with our team of IT experts and tell us your goals, and we’ll help you create a cost-effective IT strategy that improves efficiency and your IT budget.

If you’re not ready to talk to us yet but would like to learn more about increasing IT efficiency without spending more, then download our free eBook – ‘How to Increase IT Efficiency Without Spending More’. In this guide you’ll learn practical tips to save money, eliminate inefficiencies, and embrace automation.