Enterprise IT budgets are notoriously tight, and as pressures increase, CIOs are having to think creatively when it comes to doing more with less money. New technology, the need to replace end-of-life hardware and software, the demand for increased productivity, and the persistent desire to lower costs – all of these factors combined means that being a budget-conscious CIO is more difficult than ever before.
Any enterprise CIO knows that trying to innovate and improve while struggling to “keep the lights on” is easier said than done – so consider these tips from successful IT leaders about using a tight IT budget to its full potential:
Forecast budgets and projected usage
Frequent and thorough budget forecasting is essential if you want to avoid wasted resources. Budget management forecasting prevents expenses from growing out of control and gives the CIO fair warning if they ever do. Exceeding your budget by 10% is easily salvageable if you act in good time, but a budget that has run over by 50% without anyone noticing can be a recipe for failure.
Just like your budget needs to be controlled, so too does resource usage. As a CIO, it’s up to you to make sure that project managers carefully assess how many people are working on a project, as well as the project’s predicted future resource requirements. This will ensure that the project gets exactly what it needs to be successful – no more, no less.
Don’t forget the humans
Although as a CIO you’re more concerned with hardware and software than human resources, taking a closer look at how you’re managing your personnel can reveal that HR is a hefty expense for your IT department.
Data centres are costly to set up and manage efficiently, often requiring employees with specialised skills, upgrading infrastructure and investing in extensive training. So a savvy CIO will always be on the lookout not only for stellar talent but also ways to integrate and automate IT operations wherever possible.
For many small businesses, the cloud is proving to be a more cost-effective option than a full data centre: cutting out the need to create infrastructure from the ground up, reducing maintenance and admin costs, and easily scaling to meet a growing business’ needs are all achievable by investing in a good cloud solution.
On the other hand, some CIOs have experienced hidden costs and inconvenient lock-ins with cloud providers that all but nullify any cost savings that choosing cloud would have provided. Additionally, there are questions of compliance and regulation, security, visibility, latency and more – all of which combine to make a private data centre the logical choice for some CIOs – especially those in larger organisations with more demanding infrastructure requirements.
Optimising with outsourcing
Outsourcing your IT infrastructure is perhaps one of the most strategic decisions facing CIO’s today. By combining resource sharing and billing-on-demand, cost reductions can be seen instantaneously.
When outsourcing your organisation's IT functions, you are able to control costs by paying a set monthly fee, so you know what your expenditures are and they do not fluctuate from month to month. You are also able to save on the costs gained by an increased level of productivity, lower cost structures and expertise. When you have your own IT department to manage, it can be extremely expensive as qualified IT professionals must maintain their level of expertise as well as be adequately compensated.
Leaving the technological aspects of your business in the hands of professionals not only saves money but can streamline daily operations. Every IT department has limits to its resources, outsourcing allows you redirect team members from non-core activities toward activities that provide the greatest return. By allowing a qualified managed service provider to take care of your IT functions, it frees up your resources to concentrate on the areas that make you successful and grow.
For more information on how to prevent issues from costing your business money, download our 5-step guide to IT department budget development eBook.