How to optimize technology costs in organizations?

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In the IT area of any type of company, it is important to optimize costs as part of the strategies and good practices of its CTOs and technology leaders. To achieve this, it is important to consider that some expenses can be reduced, paused or eliminated depending on the state in which a company is. Here are some tips to help you optimize your technology costs efficiently.

1. Evaluate based on immediate objectives

The first step to optimizing the costs of digital technology is to reduce, suspend or eliminate some technology services or projects that cannot produce an immediate economic impact. On the other hand, if it is advisable to promote technological services in which payment is on demand and that deliver a return from the first moment they are hired, such as cloud services for companies.

2. Reduce costs, rather than eliminate

Nowadays, 25% of average IT budget is spent on capital, according to Gartner data. Although some technology costs such as licenses, software or rental of some equipment is more feasible to eliminate for the distribution of expenses, in certain projects it must be evaluated if this does not affect the level of IT operation. If they are really necessary, they can be reduced or kept in "standby mode" depending on the flows and the future projection of the business.

3. Consider cash flow

The constant inflows of cash into a company are essential to maintain cash flow. Therefore, it may be advisable to keep an inventory of both the internal products and the provision of technological services that are contracted and evaluate the impact they have on the financial statements, taking into account the case of gains and losses recorded. For example, reducing software licenses or own assets (hardware) can help reduce a company's IT spending. On the other hand, certain technological services such as virtual servers in the cloud are ideal to optimize the costs of technology related to infrastructure, because they offer a wide range of solutions and services, achieve savings in operating costs and there is a lower capital recovery. weather. AWS 'broad portfolio of solutions and services enables organizations to drive measurable business success. Thanks to AWS, it is possible to obtain savings of 75% up to 90% over on-demand rates. Therefore, they help them drive growth and reduce costs significantly in the long term.

4. Control expenses

Once the inflows and outflows of money have been identified through an inventory, it is advisable to continue with their control. Now it is time to point out which costs are already committed to suppliers or anticipated, and which could be returned or suspended if the occasion warrants it, seeking not to affect the cash or the operations of the company. In the case of fixed expenses, you can consider eliminating them gradually, if they are not absolutely necessary. Or, for variable expenses you can establish a strategy of reduction, suspension or elimination for a set time.

5. Spend efficiently

Some business expenses are more expensive when it comes to their own infrastructure, and due to the use, operation and constant updating of technology, they turn out to be inefficient. For example, one way to optimize costs would be to work with providers specialized in the provision of technology services that have serverless platforms, as they are a very efficient solution compared to the costs of physical servers. This is due to some factors such as:
  • They are charged per invoked request; that is, an expense is generated only for its use.
  • They scale based on growth by the number of requests made.
  • They execute services without the need for an expense for their administration.
Do not forget that the costs of digital technology do not necessarily have to be eliminated, and it is always better to optimize costs based on the available budget and the objectives that are established.
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