Across all industries, having a solid IT system, IT setup, and IT support is critical to a business’s overall functionality and existence. A company’s IT can include many components, from specialized software to robust hardware and even dedicated personnel.

The IT cost structure to keep a business open and operating smoothly is part of a company’s overhead, meaning it’s a general operating expense needed just to run the business. For business owners wanting to reduce costs, the IT budget is considered just as much as any other department or area of the company.

There are ways to reduce your IT costs without compromising functionality, infrastructure, and data security, though, so we’d like to highlight the following tips in this article:

1. Outsource to a Managed IT Services provider (or MSP)
2. Shift to using cloud computing
3. Understand and assess all current costs
4. Train your staff

Reduce IT Costs by Outsourcing to a Managed Service Provider

Many businesses choose to reduce their IT costs by outsourcing instead of having an internal team on the payroll. IT is one of those departments that involves a particular set of trained and knowledgeable personnel. It is also the case in many business setups that an internal IT “department” is only made up of one person pulled in a million directions.

Relying on a unique hiring niche and having someone who cannot handle an entire company’s IT needs is challenging. Some inefficiencies and bottlenecks occur in these scenarios, and ultimately, the department’s full potential is limited.

In terms of a budget, having a full-time employee on the payroll includes salary and benefits, retirement contributions, taxes, and liability costs. There is also an onboarding ramp-up. And the position is so specific that if the person quits, is fired, or is just not good at their job, there’s a considerable gap in operations that cannot easily be filled or maintained.

Outsourcing to a managed IT service or managed IT services provider (MSP) allows businesses to set up a specific contract to have another company manage and deliver the IT services and support they need. An MSP is a company specifically designed to have technology experts on staff who will work with businesses big and small across any industry. In addition, MSP representatives are knowledgeable, keep up with tech trends, and are trained to customize systems, structures, and support accordingly.

By outsourcing, a company has the benefit of a knowledgeable and effective IT team that they do not have to hire in-house. There is no onboarding component at all. An MSP representative can jump right in and lead and present strategies and suggestions. This allows businesses to have the exact IT setup they need and a solid foundation to grow/expand.

MSPs allow businesses to streamline IT systems and services differently, and they also offer internal and external IT support/training/resources. They are a “one-stop-shop” so that businesses can design an all-inclusive contract and service package consistent with budget projections.

Shift to the Cloud

Shifting to a cloud computing network is another way many businesses save valuable IT costs (and become more efficient in the process). The Oxford Language dictionary defines cloud computing as “the practice of using a network of remote servers hosted on the internet to store, manage, and process data, rather than a local server or a personal computer.” The “cloud” component is the “hosted on the internet” piece.

A business no longer needs an on-site data center by using cloud computing. This means no more server racks, extra electricity usage for the power and cooling of servers, and no more IT personnel tasked with monitoring the center. There are significant costs saved immediately, eliminating all three of these components, not just in hardware, software, and utility bills, but in the ability to shift an IT personnel’s focus to other critical areas.

Cloud computing services also allow for ongoing scaling across power, storage, bandwidth capability, etc., without additional time or equipment. Nothing physically needs to be rebuilt, rewired, or replaced; it’s just upgraded online.

Additional Ways to Reduce IT Costs

Two additional tips we want to highlight to help reduce your IT costs might seem simple, but they are often forgotten or overlooked:

1. Understand and assess all current costs
2. Train your staff

For any department, IT or not, understanding and assessing what’s CURRENTLY going on allows a business to make more informed decisions about what SHOULD be going on. One of the first steps to figuring this out is to go through your books and see what IT spending and costs are occurring, line item by line item.

The next step is actually discussion-based to figure out what all these costs are for. Are they known? Unknown? What’s the purpose? What’s the cause? What are your fixed (ongoing) costs vs. variable (one-offs)? Are these needed or not?

Then, the question becomes, what is the future impact of cutting these costs or reducing this amount?

If you have an internal IT representative or department, this is a more significant strategy reflection and planning discussion. Many IT consulting firms and freelance contractors can help businesses assess their IT structure, support, and set up with this lens. What’s important to understand is to reduce costs; you need to understand those costs, why they exist, if they are necessary, and what the greater impact is.

Training your staff is also a critical component in reducing IT costs. While this might be at an individual level, it makes a significant impact. Correct IT support, training, and resources are directly related to staff members respecting IT equipment and keeping it in good working condition.

Contracting an MSP can prove critical for all of these ideas and more. Contact ProServ today to discuss real options and solutions to help your Kansas City or St Joseph business.