Switch on the news, scroll your phone, or yarn with your mates over a beer, and there’s no escaping it: There’s some pretty dire business stats floating around right now. With New Zealand’s cost of living crisis, consumers and business owners are not keen to part with any more cash than they absolutely have to.
We know when times are tough it’s tempting to start turning things off and cancelling your tech licences. But when it’s a kneejerk response, that can seriously backfire, hurting you much more in the long run.
But it’s not all doom or gloom. As a business owner you have options. One avenue is to review your tech spend to make sure it’s still working for you.
Read on for 8 tips on keeping your IT costs under control without damaging your resilience, reliability and reputation.
1) Review your strategy, vision and goals first before making cuts or changes.
Remind yourself why you chose a particular system, software or device. Does the software still align with your goals? Have your goals changed? Or did you only need it to bridge a gap in your capabilities for a specific project?
If it’s still fit-for-purpose, keep it. If you are no longer using it, let it go or move to a more cost-effective or free plan.
2) Predict and imagine the consequences of cutting a licence.
Book in a team “what-if” session. Brainstorm the positive and negative impact of each cost-saving decision. Give yourself permission to be pessimistic for a while.
For example, ask yourself: If you cut back on a particular licence will it hurt your customer service? Do you risk losing loyal customers, or will it be harder to find leads? Will cutting your security spend leave you vulnerable to cyber threats and data breaches?
3) Review your current spend across all categories.
Take a broad approach to reviewing your technology spend – don’t forget to include:
- broadband and fibre plans
- mobile internet and data plans
- hardware – laptops, PCs, phones, tablets, printers
- software for collaborating and communicating – including project management
- other software as a service (SaaS) – including inventory planning and management
- file storage and sharing software
- enterprise planning software
- cloud services
- website hosting
- the cost of procurement including RFPs (request for proposals).
- IT consultants and contractors
Categorise them into core expenses and those which are “nice to haves” – identify gaps as well as wastage and duplication.
4) Don't be afraid to negotiate. You might find some great deals just by asking.
In this competitive market, vendors big or small want to retain their existing customers. You might go to cancel a subscription, for example, and they automatically offer you a rate not advertised on their website.
Don’t leave quietly, it pays to have a conversation with your vendors to see if they’re open to offering you a discounted rate or another tier of service, particularly if you’re a loyal customer.
5) Take a good honest look at how you use your IT to optimise your software licence budget.
Having accurate, real-time data will help you make smart decisions about where to cut costs and where to invest.
Are you paying for more than you need? Maybe a pay-as-you-go model would work better than unlimited access. Review the service tier you’re on – are you on gold, when bronze will do? Or do you find yourself needing more than you’re currently getting – including a more customised experience and personalised customer service?
Regular check-ins can help you spot areas where you’re overspending or where you might need more features, capabilities or support.
6) Have any newbies entered the market?
Regularly review what’s available in the market. I’m not giving you a free pass to appease your shiny object syndrome, but it’s always helpful to keep track of new developments.
Keep an eye on LinkedIn and for press releases on new technologies. Book a demo to see what it’s like. Often new SaaS providers will add sweeteners for you to sign up as founding members in return for you sharing the experience with your network.
New organisations enter the tech market all the time – including many fantastic Kiwi start-ups. You may find local companies are more aligned to your values and vision which can go a long way, too.
See if there are better options out there. This doesn't always mean cheaper – sometimes it’s about understanding your ROI and which features give you room to flex and grow.
7) Think long-term. Consider the full financial picture of your IT decisions over time.
Don’t pull the plug on any digital transformation project, the advice at the beginning still stands and if done properly, it will help you weather storms – literal or economic.
Build in the cost of a purchase for the duration of time you need it. Don’t forget to include price rises and inflation.
Watch this space for a free tool (currently in development) which will help you figure this out.
8) Refine your procurement processes.
If you haven’t already, invest some time into establishing best practice for your buying decisions.
Can someone in-house compare vendors, or do you need to outsource this function? Do you have a checklist – and a set process – so you can apply filters and choose vendors based on data and due diligence, not hunches?
To save money and stay resilient, don’t slash your tech spend – give it a prune instead.
Instead of slashing your budget, successful companies know how to prune their expenses with a more thoughtful approach.
If you want to dig deeper into this topic, I’m offering in-person workshops on how to manage and review your costs. Gain some practical and relevant tips for developing and maintaining resilient and efficient IT.
Visit Target State | Workshops to find out more
Further reading:
https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/winning-the-smb-tech-market-in-a-challenging-economy
https://www.certero.com/software-asset-management/certero-for-enterprise-sam/software-license-optimization-cut-spending/
https://www.lansweeper.com/blog/cost-optimization/cost-reduction-strategies/
https://entint.com/blog/it-asset-management/sofware-license-harvesting-cost-savings/
