With inflation soaring and recession fear growing, businesses must make crucial decisions to save money and brace for a possible economic storm. Businesses of every size must examine their budgets to right size their telecom and IT spend, to cut or consolidate investments. In fact, IWG’s annual survey of CFOs already found 91% of senior financial executives believe a recession is inevitable; over a third (36%) expect it within the year, and 97% are already cutting costs by more than 10%.
While Gartner still predicts global IT spending will reach $4.6 trillion in 2023, an increase of 5.1% from 2022, economic turbulence will change the context for technology investments, increasing spending in some areas and accelerating declines in others. The way companies are cutting their internet technology spending most often? Consolidation. According to Enterprise Technology Research (ETC), a third of all organizations are looking into consolidation.
The rise of cloud-based applications has led to an increase in shadow IT wasting your software budget
Before the pandemic, IT teams managed nearly all software spending for an organization. This changed at the height of the pandemic when the reins were loosened. Suddenly, multiple teams were able to purchase software independently if it kept the business functioning.
This change meant IT teams lost the comprehensive overview of how the organization was using cloud-based applications, like SaaS. Duplicative services might be purchased, applications be underused (or even unused), and budget dollars wasted.
Shine a budget spotlight on shadow IT to right-size and consolidate your IT spend
Your IT team should now actively monitor cloud-based applications on your network. To make this happen, you first need to take inventory of the utilization of applications on your network.
Once you know which SaaS your company is using, you can begin to make necessary decisions around:
- Most expensive SaaS you are paying for
- Which applications have the highest number of users
- Examine license utilization — if users haven’t logged in for 30, 60, or 90 days consider eliminating their license for potential savings
These three steps alone can account for huge savings. For example, ViacomCBS, the US media conglomerate, cut their annual Zoom expenditure by more than 32% by finding and removing unused Zoom licenses.
Consolidate multiple software licenses to right size your IT budgets
When auditing which applications your organization is using, look for multiple software licenses that offer the same technology and get rid of one of them. For instance, if your business pays for Microsoft 365, which includes Outlook and Teams, do you also need a license for video conferencing tool Zoom? Or, if you invest in Google Workplace, you could make calls through Google Meet, making your license for Zoom redundant. Or you could lose Dropbox if you already have file sharing through AWS. Ask us.
It all comes down to ensuring you are fully utilizing what you are paying for — why pay for Twilio when you already have a license for Microsoft (which includes a competing Twilio product)?