How to Free Up Unnecessary IT Spend for Strategic Investments

May 15, 2020 10:25:04 AM / by Ashish Patel

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Surviving and growing market share during an economic downturn requires a combination of both offensive and defensive plays. 

On the offensive side, this might include breaking industry and audience barriers, while implementing untested strategies to circumvent purchasing lulls and market uncertainty. From a defensive standpoint, it can also pay off to dial back expenditures and consolidate your company's niche competencies to outlast trying times.

As an example, take CapEx investments. Appropriate, ongoing spending on major capital expenses can prove pivotal to a company's ability to recover, once a recovery is underway. Keeping capital on hand during a recession allows companies to seize rare opportunities to access CapEx investments at a discount - but the same factors that make these opportunities available during tough economic periods also make them less appealing to all but the most forward-thinking companies.

It’s easy to understand that, by freeing up unnecessary spend within your IT department, you can uncover capital that can be reallocated to other, more impactful initiatives. But how do you actually do that? 

The following suggestions for freeing up revenue within your organization may or may not be appropriate to your company’s circumstances - consider them all, and apply what’s relevant:

Reprioritize Your Projects List


The projects you had planned to prioritize during the former bull market may not be the ones you focus on, now that the bulls are in charge. Consider prioritizing ideas that meet any of the following criteria:

Revenue-Generating Ideas that Can Be Released Quickly


These types of ideas are ideal for lateral market expansion. Upselling opportunities such as additional service tiers qualify here, as do companion apps/products.

Ideas that Have a High Likely ROI


Whereas the previous group of ideas capitalized on speed, ideas that fall into this category present the most upside for boosting revenue. Fresh product lines in deeply assessed demographic segments could fall into this category.

Ideas that Attract New Audiences


Ideas that are necessary to implement to go after new “winner” market/audience segments might not be the fastest to implement, and they may present an elevated risk for companies looking to bring about quick revenue boosts. However, carefully executed ideas belonging in this category generally offer the best opportunities for long term market expansion. 

Eliminate Unnecessary Activities


Although core facets of your IT operations might not readily accommodate cuts, vestigial efforts outside of core competencies - as well as redundant processes - should be assessed and eliminated where possible.

The following are a few important questions to ask when contemplating the removal of specific activities from current IT processes:

 * Where do redundancies exist?
 * Can unnecessarily duplicative work be minimized/eliminated?
 * Where can manual tasks be simplified with digital systems?
 * What can be automated?

Where outright automation is concerned, it can help to consider the implications any moves on this direction will have on your IT department's responsibilities. Use automation to free up headcount to work on higher priority tasks, rather than simply cutting underutilized talent.

Audit Your Technical Setup


The results of targeted audits form the foundation for future plans, allowing companies to make important spending decisions that keep revenue from flowing towards inefficient processes. A proper technical audit should touch on the following aspects of IT operations:

Audit User Licenses


This process can be handled in multiple different ways, depending on the kinds of user licenses your organization is bound by. Where most proprietary user licenses are concerned, your IT department should be able to operate freely; however, single user and individual workstation licenses may place more restrictive limitations on usage. 

Any underutilized licenses should be considered for cancellation. Discontinuing the use of subscription-based, licensed software presents clear opportunities for revenue preservation, though this only works for tools and systems your team can do well without.

Audit How Applications Access Databases


Monitoring and recording database actions of individual applications can help in streamlining their functions. Needlessly redundant database I/Os can negatively impact application speeds, leading to slower IT task completion down the line.

Issues with access control should also be assessed and sorted out to simplify IT processes. Auditing application-specific database performance allows for niche configuration errors to be spotted before they create more serious problems or threaten data integrity.

Review IT Governance


Existing IT governance and the organization of resources within your company can be modified to better support immediate business objectives. Best practices defined in your company's IT governance model should directly reinforce core business directives, while ensuring compliance and security standards are met.

Deciding on a governance model for your IT division involves focusing on risk mitigation and/or bolstering efficiency. Frameworks such as the Information Technology Infrastructure Library (ITIL) are best for the latter objective - achieving highly efficient service architecture through sound, tested strategy.

Consider Transitioning to the Cloud


Adopting cloud-based IT infrastructure can make cost reductions in physical hardware and specialized maintenance processes a reality for most companies.

SaaS, PaaS and IaaS models allow you to scale resources up or down as needed, without changing key systems characteristics. Besides system design preservation through decoupled scaling, cloud solutions allow your business to optimize individual IT operations without committing your entire IT department to the cloud model at once.

If you’re in doubt about potential cloud service benefits, you can always use a test project as a cloud benefit barometer to start. Start small, and expand your efforts as it makes sense to do so.

Build a Professional DevOps Infrastructure


DevOps practices hinge on streamlining the flow of information among team members and the standards for collaboration, while optimizing time to deployment. As a result, an appropriate DevOps approach can save your business money through:

 * Lower release costs
 * Faster release times
 * Better insights

Assess Your Delivery Cycles


IT service delivery is contingent on your overall strategy, infrastructure design, and ongoing optimizations. Your IT service delivery cycle should begin with establishing requirements and come to a close at live implementation; however, there are many opportunities for process improvement hidden between these two end-points.

Assessing testing processes and results can yield insight into deficiencies at other stages of IT operations - many of which may be able to save you money once they’re addressed.  

Freeing up revenue for strategic investments involves considering your organization's overarching objectives and how they relate to internal processes at every level of operations. Leveraging your IT department's procedural flexibility can allow for significant revenue reallocation without negatively impacting performance, when it’s done carefully.


For more on what it takes to survive in an economic downturn, take a look at Simpat's free white paper, "Winners and Losers: Why Some Companies Thrive in Economic Uncertainty While Others Fail."

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Ashish Patel

Written by Ashish Patel

Ashish Patel is the CEO and Founder of Simpat Tech.