5 Ways To Help Your Business Cut Direct Costs

Today the most popular and the most effective form of cloud computing, the hybrid cloud allows for an optimal distribution of workloads between public and private environments. Cloud storage is a popular way for companies to reduce IT infrastructure costs. A study conducted by AllCloud found that 85% of organizations expected to have most of their workload on the cloud while 23% planned to be cloud-only by 2020. At the same time, managed security services are a cost-effective alternative to implementing in-house security teams and systems. ACIO Magazine survey findings showed that smaller businesses spend about 6.9% of their revenue on IT infrastructure costs, which is above the recommended 4-6% range. Medium companies spent an average of 4.1%, while larger-sized businesses paid 3.2%.

Get unique business management insights delivered straight to your inbox. Success Stories Learn how Northridge has helped businesses in nearly every industry, non-profit, and governmental agency. Explore exciting project-based opportunities for current clients in the U.S. and Canada. Therefore, the project manager must be able to work within these boundaries throughout the process. Note, however, that reducing the scope of the project may require the approval of important stakeholders. Project length is one of the main reasons why companies fail to meet their original budgets.

strategies to reduce IT costs

It also plays a critical role in controlling costs for those facing severe budget and operating constraints. Automation is the key to thriving following cost reduction strategies the crisis, and we provide five steps to get started with automation. Rationalization also aids in the simplification of supply chain management.

This method assures high quality and reliability by design of the product, preventing costly errors, defects, reworks and overhead demands. Designing in quality requires a significant amount of planning and preparation. Simplifying designs, taking past quality problems into consideration, automating processes and thoroughly documenting every step of the design are all steps to reduce https://globalcloudteam.com/ quality cost. Experience with first-time product line rationalization efforts suggests that more than 60 percent of a product line contributes less than 10 percent of the total margin. Successful rationalization initiatives have cut total supply chain management costs up to 50 percent and improved performance on inventory turns up to 100 percent among top industry performers.

Prioritize – In analyzing data and speaking with customer service representatives, many different areas for improvement will surface. You can’t change everything at once; analyze all of the opportunities with a specific focus on frequency, cost, and customer impact. How are organizations reacting to the impact of COVID-19 while attempting to remain profitable? Short-term tactics like hiring freezes, contract reviews and delayed investments are becoming the norm to trim costs. Yet these temporary solutions will not position an organization for long-term resiliency. Financial services firms are challenged to cut costs and maintain a positive balance sheet despite forecasted defaults.

Create A Budget To Succeed

The COVID-19 pandemic intensified the need for companies to make the customer experience as effortless as possible. Watch our on-demand webinarto learn how leaders can create efficiencies that reduce costs and stabilize revenue. While a handful of industries are flourishing during the COVID-19 pandemic, far more companies are fighting for survival. And as the slow months drag on, forward-thinking enterprises are finding answers in technology solutions. Our POV paper explores why you need a long-term strategy, rather than relying on aggressive cost-cutting measures in the short term. With the rising demand for efficient and contactless services, organizations are turning to automation.

This is most evident in the tech industry, but many other companies turn to it as well. According to a What’s to Become article on outsourcing statistics, 30% of US companies outsource, while 64% of outsourced services are related to software application development. These findings speak about the popularity and convenience of staff outsourcing. There are countless techniques to make significant IT cost reductions. However, spending a lot on IT infrastructure costs does not make one a top performer.

Companies that thrive in the most competitive environments, and companies that should be thriving. They all come to us looking for better ways to do things, streamline systems, reduce manufacturing costs and increase profitability. For this collaboration to run efficiently, all parties must have access to accurate, real-time data relating to shipment processes, customs clearances and demand forecasts. It is clear that CIOs must reduce infrastructure costs to focus on innovation. Imagine how much money you can save by utilizing cost-cutting techniques.

strategies to reduce IT costs

As we go into the second half of 2020, we wanted to share 5 ways to reduce or keep your IT infrastructure costs under control amid a COVID-19 response. Twproject is a highly flexible project management tool for teams of all sizes. This management technique can help improve the efficiency of a project which, as a result, can lead to saving money. Therefore, the project manager must ensure that critical resources are acquired and allocated appropriately before the project begins. Apart from the evident pricing advantages, such solutions also give you more flexibility.

Execute consistently across all touch points – One of the reasons global organizations succeed is that customers get the same experience in Beijing, China as they do in Chicago, Illinois. Now customers research companies and products online before making a purchase, shop in-store or online, communicate with companies via social media, and more. Customers expect an integrated and consistent experience no matter which channel they chose to interact with you.

Employee Time Clock

Therefore, you won’t be forced to continue using a certain service provider if it doesn’t fit your business needs. Imagine if one specialist spent their time trying to master each different computer or program. It would take an enormous amount of energy to learn each new platform. Furthermore, all other employees will be familiar with the same platforms and have an easier time resolving issues. There’s little wonder about the reasons cloud adoption is so widespread. As stated in a Microsoft Trend Report, “nearly 80% said they’re saving money, seeing more productivity and better security” as a result of utilizing a cloud approach.

  • The total cost needs to be quantified so everyone must make decisions with total cost in mind.
  • Success Stories Learn how Northridge has helped businesses in nearly every industry, non-profit, and governmental agency.
  • At the same time, managed security services are a cost-effective alternative to implementing in-house security teams and systems.
  • In addition, the project’s costs can be monitored by reviewing its progress during each stage and making sure there are no discrepancies.

By rationalizing these products away completely, your supply chain is instantly simplified. In addition, establishing Vendor/Partnerships and involving them on product design is another method in supply chain simplification. As part of the design team, vendors can recommend low-cost products that will be readily available for product creation.


In response, most IT leaders made rapid cost reductions while addressing a new reality for both its employees and customers. When most business leaders hear the term “improve customer experience,” many immediately think of investment … new systems, more customer service agents, etc. With the right approach, improved customer experience can also dramatically reduce operating costs. Here are seven tips for creating an outstanding experience while simultaneously increasing ROI. Automation enables organizations to overcome obstacles created during the pandemic and get back to operating with some sense of normalcy.

We continually reduce our manufacturing costs by identifying the production constraint and then applying all the tools and techniques at our disposal to improve the performance of the constraint. When it is no longer the constraint we identify the new constraint and repeat. Tools and techniques include proven best practices from Lean Manufacturing, Six Sigma, Theory of Constraints, and other sources. Non-constraint reductions in cost are also valued, but are a second priority to eliminating waste and increasing throughput at the constraint. The best way to reduce manufacturing costs is to apply lean manufacturing techniques to eliminate waste AND apply theory of constraints techniques to increase throughput . Standardization reduces the number of part types and makes it easier for parts to be pulled into assembly.

Cutting costs needs efficient logistics and supply chain management, where supply planning incorporates every process step and anticipates every potential obstacle. Global uncertainties, political upheavals, trade wars and market volatility have made it more challenging than ever for businesses to forecast demand and growth opportunities. Wary, companies are constantly exploring options to keep a check on costs, especially direct costs. You will find that the hundreds, if not thousands or millions, of dollars saved, can be used for growth and business innovation opportunities. Revitalize your financial plan and significantly reduce IT infrastructure costs with these tactics. This is a form of a business process improvement that can help maintain compatibility.

Speed Up Transformation With Cloud Migrations

Vendors are a large part of your direct spend, so focus on building strong supplier collaboration, especially with the key ones. Develop clear communication channels, strive for a flexible rather than a merely transactional relationship, and you will be able to strengthen the quality of your influence on the supply chain. Hiring and training new IT staff can have a significant impact on your budget.

strategies to reduce IT costs

Jackson National Life modernized 40 critical applications, enhancing operational efficiency and the user experience, while also reducing overall maintenance costs. However, this is an ongoing process within project management and requires constant monitoring to try to maintain the project budget. To do this, you need to map your expenses before you start and use budget tracking tools to stick to them throughout the project lifecycle.


Although project management software often has a high upfront cost, using it can help reduce the cost of a project. Effective transportation planning is another key to managing supply chain costs. A suitable warehouse management system, a centralized logistics/shipment hub, good insurance coverage, and thorough estimates for overseas sourcing will all help reduce costs too.

Use The Right Technology

Plus, you may need to purchase specialized security hardware and hire multiple employees. Once you start to compare both options, it is easy to see how that managed security has an enormous business value. Furthermore, many service providers put a team of expert staff at your disposal.

CIO recently did a COVID Impact Survey which revealed, not surprisingly, that 2020 IT budgets saw an impact from COVID-19 and Cost Control/Expense Management is now a top priority for IT Leaders. Prior to COVID-19, 59% of IT Leaders expected an increase and 34% expected a flat budget in 2020, but post COVID-19 only 25% expected budgets to be higher than 2019 levels. Agree on an improvement target and any external resources needed to reach that target.

Ways To Reduce Or Keep It Infrastructure Costs Under Control

Having people you can rely on without worrying about their efficiency or spending money on the onboarding process is a big advantage in business. It is essential to keep the business running as usual while making these critical changes. New company processes, data transfers, and adding or removing individual elements can significantly impact the flow of business. You must test each business operation beforehand to ensure that it functions as expected after implementation.

They can switch to virtual environments to decrease energy and hardware expenses. Additionally, in such a setup the memory and CPUs can be separated from hardware which allows space and flexibility for other uses. Virtualization is one of the methods that can help you achieve significant cost savings. Determine which areas you can consolidate and which require more attention. Be strict on office policies because the electricity bill can be a ridiculously high business cost. Unplug unused electronics, turn off lights when not in use, use sunlit rooms, and more, to save on money.

To avoid resource waste, many businesses opt for a cost management tool, such as Cloud Admin, to prevent unnecessary overhead. A study by Business Technology Labs reported that companies experience aspending reduction of 25-40%due to outsourcing. It is no wonder that 78% of small businesses use freelancersto gain an edge over opponents.

Standardizing your platforms could be as simple as providing all employees with the same type of computer or operating system. With everyone on the same page, nobody will question what application works on which platform. Companies that move to the cloud see an increase in process efficiency, growth, and time to market. It is easy to see that cloud computing helps companies save money and boost productivity. There are also more benefits to the whole community when you buy locally.

Consider how much you spend on IT infrastructure per worker per year. Now calculate how much cost savings you can achieve by lowering those by 10%. If you can find a way to do it, you would be able to reallocate all these funds into better prospects. However, reducing expenses for capital expenditures can have a big impact on your budget. This is why it is important to make throughout decisions when it comes to choosing the right technology and equipment.

Share this post

Share on facebook
Share on twitter
Share on print
Share on email
Share on whatsapp
logo eulutopelaimunobr
© 2020 #EuLutoPelaImuno - Brasil