Top 4 Strategies to Cut Your IT Management Overhead

Every organization is looking to optimize its IT budget, especially amid global economic instability.   

IT costs typically account for the most expensive element in an organization’s budget: 

• Increasingly complex technology and associated costs. 
• Evolving security threats and regulatory compliance requirements. 
• Personnel expenses, including salaries, benefits, and training. 
• Complex software licensing fees.  
• Maintenance support contracts for hardware, software, and networking equipment. 

• Datacenter costs, including network infrastructure, backup systems, and disaster recovery. 

Companies must leverage best practices to cut IT management overhead and regain control over IT sprawl. CIOs, the critical orchestrators of IT strategy, are walking a tightrope as they try to balance the dichotomies of controlling IT spending and empowering their digital transformation programs. 

Gartner projects that IT spending will remain strong despite an uncertain economic climate and inflation and is expected to reach $4.6 trillion in 2023 - a 5.5% increase from last year.  

But priorities are shifting as companies seek ways to optimize IT spending while modernizing their infrastructure to transform their business models and generate new revenue streams. 

Organizations must lean into modernization and rethink their approach to IT management by implementing proven strategies to minimize financial and operational IT burdens, achieve cost efficiency, and maximize the value of their IT investments. 

Below are our top four recommendations for cutting IT management overhead. 

Top 4 Strategies to Optimize IT Costs 

Despite their best efforts, CIOs face numerous challenges when attempting to regain control over IT management budgets.  

One obstacle is the constant demand for innovation and digital transformation, necessitating continuous investments in cutting-edge technologies. Moreover, the ever-changing IT landscape requires organizations to adapt quickly, rendering traditional budgeting approaches inadequate in the face of unpredictability. 

Sometimes unused subscriptions, over-hiring IT personnel, or IT system complexities can slowly result in excess overhead. 

But by identifying and eliminating inefficiencies and optimizing resource allocation, organizations can get on the right track to optimize their IT budgets and shrink IT management overhead. 

Modernize IT infrastructure

IT modernization can improve operational capabilities and introduce more cost savings. Reducing the number of disparate systems and platforms via consolidating and streamlining IT systems and applications can significantly simplify IT management, reduce maintenance efforts, and improve resource utilization. Consolidation can also lower overhead costs for managing and supporting multiple complex systems. 

Cloud migration and virtualization are other important pieces of this puzzle because it involves leveraging scalable, flexible infrastructure resources. Migrating workloads to the cloud or virtualized environments remove dependency on extensive on-premises hardware, reduces maintenance costs, and helps control IT management overhead by paying for resources based on actual usage.  

Plus, cost savings are one of the biggest drivers of cloud adoption. Usually, there are minimal upfront capital expenses for hardware because there’s no need to purchase cooling systems, physical servers, or network storage. Upgrades are incorporated into the monthly fee, which also reduces software costs. Additionally, cloud promotes business continuity, which can positively impact indirect business costs tied to server downtime. 

Strengthen security and compliance 

Outdated IT infrastructure often poses security risks, resulting in additional costs for breach remediation or non-compliance penalties. By implementing comprehensive security measures, organizations can mitigate the potential for security breaches, cyberattacks, and data breaches that require investigation and recovery. Preventing such incidents reduces the time and resources spent on incident response and management. 

Cybersecurity accounts for almost 50% of a cloud-driven digital transformation program’s success. For example, adopting a zero-trust security model encompasses data, applications, identities, networks, endpoints, and infrastructure to significantly improve cyber-resiliency, boost transparency, and help close security gaps. Furthermore, zero-trust simplifies the overall security architecture by eliminating the traditional perimeter based-approach, including complicated network segmentation, VPN setups, and the IT management overhead surrounding maintaining these infrastructure components.  

Overhaul licensing

Approximately 32% of software spend is wasted, often because companies either estimate how much they should spend on software, aren’t sure how to calculate their license position, or don’t know how to plan for their software needs based on their IT estate.  

Around half of companies across the world use Microsoft Azure for cloud services. Still, the sheer nuance of Microsoft licensing can quickly result in spiraling costs, particularly as organizations expand their digital landscape. It’s also one of the costliest line items in an IT budget because of the breadth of products, user-based licensing model, and enterprise-level features and integration, among other reasons. 

Optimizing licensing can contribute to lowering IT overhead costs and freeing up resources for other strategic initiatives. This should include license consolidation to remove underutilized or redundant licenses, auditing to ensure software usage aligns with the purchased licenses, reallocating licenses based on user demands, and negotiating favorable licensing terms with software vendors. While there’s no universal approach to licensing optimization, a Microsoft Licensing Assessment can help companies identify opportunities for improvement and develop an actionable strategy to enhance the impact of licensing.  

Leverage external IT partners 

The concept of maintaining a bloated IT department is becoming antiquated. From an infrastructure position, the pandemic has proved that businesses can operate efficiently without relying on a fully staffed, internal team of IT professionals.  

On the other end of the spectrum, many companies doubled down on expanding their IT teams during the pandemic in response to the surge in online activity and demand for technology services. Organizations assumed this pace would be the new norm but are now reassessing to decrease overstaffing and effort redundancies via a leaner workforce model. 

Also, the widespread tech layoff often leads to the misconception that there’s an excess of available, skilled IT talent. A critical deficiency of skilled IT labor and demand continues to overshadow supply, a trajectory expected to continue through 2026. The steep competition for top-level talent and an all-time high for inflation influence labor costs, which are currently at a twenty-year high. The average salary for an IT professional in the U.S. is $72,180 per year, with the range for the most in-demand IT positions usually ranging between $73,175 and $377,788 annually. 

Many companies are replacing their internal IT teams in favor of IT consultancy firms that serve as a strategic extension of the business. Top industry consultants understand how to develop customized modernization strategies and implement solutions to cut overhead costs and help you regain control over your IT budget. 

CloudServus, for example, is a top 1% Microsoft Solutions Provider that can readily assume the role of your dedicated IT department and significantly minimize IT overhead costs via the expertise of our experienced team. By offloading IT management and support responsibilities to our team, your employees can concentrate on the initiatives and activities directly linked to your business’s core competencies.  

We leverage a deep knowledge base of the entire Microsoft product and service suite so your organization can operate with the most current and efficient tools and capabilities. CloudServus’ team can: 

• Evaluate your existing IT operations and identify areas for improvement, including standardizing strategic processes and eliminating inefficient practices.  
• Recommend and execute upgrades or migrations to newer versions or cloud-based solutions to enhance performance, scalability, cost-effectiveness, and resource utilization.  
• Ensure your software licenses are correctly managed and compliant, including optimizing license usage and negotiating better licensing agreements. 
• Implement a modern framework for identity and cloud security, including modernizing your identity and device management approach via an appropriate endpoint management system and transitioning you to a zero-trust security model. 
• Create a long-term IT transformation and investment roadmap that aligns your IT goals with your business objectives and evolves with emerging Microsoft technologies and trends.  

• Quickly deploy resources when needed, allowing you to adapt to changing conditions without the administrative burden of hiring or downsizing internal staff. 
• Provide services on a project basis or as needed, so you can scale resources based on your specific requirements and budget. 
• Implement proven methodologies to optimize IT operations, ensuring you can leverage best practices without investing time and resources into extensive research and experimentation. 

You don’t have to jump in head first. We offer a free consultation with our team so you can test the waters and determine if we’re the right fit for your needs. We invite you to reach out to us at CloudServus and start taming your IT management overhead.