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As technology plays an increasingly important role in the business, IT departments are evolving. They\u2019re moving from a back-office function that supports the business to a true business driver. <\/p>\nAs technology plays an increasingly important role in the business, IT departments are evolving. They\u2019re moving from a back-office function that supports the business to a true business driver. <\/p>\n
The problem is, many of these CIOs and IT leaders are still stuck working with limited budgets. IT budgets took a beating in the recession a few years back, and many still haven\u2019t recovered. In fact, according to Computerworld\u2019s yearly report<\/span><\/a>, 64% of IT leaders report either a flat or smaller budget this year over last. <\/p>\n The question is, how can CIOs and IT leaders make the most out of their budgets? While being called upon to play a larger role in the business, many must do so with limited resources. How can they succeed?<\/p>\n Today, I\u2019d like to answer that question and explore a few ways CIOs and IT leaders can save money. Now, when I say \u201csave money,\u201d I\u2019m referring to long-term savings. I\u2019m not interested in short-term cut-backs with long-term consequences. I\u2019m interested in money-saving methods that will not only reduce costs, but prepare your company for future success. <\/p>\n These tips aren\u2019t easy, but will produce significant savings if followed. All that being said, here you go: Five money-saving tips for CIOs and IT leaders: In a recent Forrester survey<\/span><\/a>, IT leaders estimated they spend an average of 72% of their budget just keeping the lights on. For many companies, this ties directly into their legacy architecture and applications. These legacy systems require more maintenance cost, effort, and keep them from innovation. <\/p>\n \n\u201cLegacy architecture limits hardware\/software options–often tying companies to outdated and costly hardware, or forcing them into expensive software options,\u201d explains Rick Hurckes, Lead Consultant at mrc<\/span><\/a>. \u201cI\u2019ve seen companies with legacy applications that tied them to outdated browsers or greatly limited their hardware options. For these types of companies, addressing the legacy architecture problem opens up a new, more cost-effective world of opportunities. It frees them from being limited to a small handful of hardware or software options, and creates opportunities that were never before possible.\u201d\n<\/p><\/blockquote>\n Now, I know–the risk and expense of such a project keeps many companies from moving forward. But, if that\u2019s you, the question you should be asking is, \u201cWhich costs more in the long run?\u201d As Hurckes explains below, the costs of inaction often outweighs the cost of action.<\/p>\n \n\u201cI\u2019ve had clients tell me they\u2019re trying to save money by working with their legacy options,\u201d explains Hurckes. \u201cAnd you know what? For a short time, they\u2019re right. However, it\u2019s a great example of being penny-wise, dollar-foolish. Here\u2019s what usually happens: They find their problems mounting each year as they try to use and maintain legacy code that can\u2019t grow and keep up with technological trends. In the end, they\u2019ve not only wasted more time and money maintaining their legacy code, they wind up spending much more years later when they are finally forced to upgrade–as the gap between their legacy code and modern standards has widened significantly.\u201d\n<\/p><\/blockquote>\n The big question is…how can you address the legacy architecture problem? While this whitepaper<\/span><\/a> lists five different approaches, I\u2019m a big fan of the \u201cextend-and-surround\u201d option. It involves gradually surrounding old applications with completely new and modern applications. It lets you modernize different parts of your systems gradually, as the need arises, without much disruption to the business.<\/p>\n \n\u201cSome cloud services are becoming more affordable than comparable in-house services,\u201d says Kelly Walsh, Founder of EmergingEdTech.com<\/span><\/a> & CIO at The College of Westchester. \u201cBy moving the hosting of key services to the cloud, you may be able to reduce labor costs, electricity costs, equipment costs, and more.\u201d\n<\/p><\/blockquote>\n Now, will the cloud work for every company? Probably not. But, it creates money-saving opportunities for companies of all sizes. <\/p>\n I speak from personal experience when I say moving to the cloud not only saves money, it saves headaches as well. Over the last few years, we\u2019ve moved many of our applications from in-house hosting to cloud hosting. It saves us from the cost of purchasing, maintaining, and upgrading servers. We don\u2019t need to purchase battery backup systems, or rush to the office in the middle of the night to fix a server problem. Those are benefits any IT professional can appreciate.<\/p>\n Now, your ability to move to the cloud usually depends on the first point (architecture). If you\u2019re still running on old architecture, chances are, the cloud–along with the cost savings that come with it–isn\u2019t even an option. This is just one way that addressing the underlying architectural issues create cost savings in other areas.<\/p>\n One of the biggest money-wasters within companies today involves a lack of communication between departments. In many businesses, departments operate on their own islands. I can\u2019t count how many times I\u2019ve seen different departments within the same company discover that they\u2019ve licensed similar software to address a similar need.<\/p>\n How does this happen? This problem occurs when departments try to bypass the IT department and solve their own problems<\/span><\/a>. This results in different departments spending money on similar solutions, unbeknownst to other departments or IT.<\/p>\n What does this mean for CIO and IT leaders? They must remain in constant communication with department heads. What problems are they facing? Do any of their problems overlap? This will help IT leaders implement software solutions that span the entire enterprise, not a single department. <\/p>\n Another big money-wasting mistake involves short-term thinking with hardware or software purchases. Many make the mistake of fitting the purchase into their current budget, without planning out the long-term cost. To truly make the best purchase, compare software\/hardware purchases in terms of 5-year or even 10-year costs.<\/p>\n \n\u201cToo many times companies look at the initial purchase price of a solution and not the 5-year cost,\u201d says Ron Thompson, Jr., Senior Vice President – Western US at DataBank IMX<\/span><\/a>. \u201cWhen implementing a new software or solution, it is never a short term investment. You need to look at the additional rollout cost, software maintenance, and infrastructure (if not hosted) cost for a minimum of 5 years. This will give you a true comparison when you are evaluating multiple products.\u201d\n<\/p><\/blockquote>\n I\u2019ll even add one more factor: shelf-life. When buying software, how long will it last? Is it regularly updated, or will it slowly become obsolete? If you\u2019re forced to replace that software in 5 years, that greatly affects the long-term cost.<\/p>\n \u201cConsider going “BYOD” (Bring Your Own Device), says Walsh. \u201cMore and more organizations are asking employees to use their own computers and tablets. Depending on the cost of services to manage the devices, there may be an opportunity to save on the cost of end user equipment.\u201d<\/p>\n<\/blockquote>\n How much savings does a BYOD strategy offer? According to this recent study<\/span><\/a>, it could save up to $1,300 per employee per year. Do the math–that delivers some attractive savings for companies of all sizes. So, how can you go about address BYOD? Here\u2019s another article<\/span><\/a> that I wrote up last year which goes into more detail. <\/p>\n So, what do you think? Would you add anything else to this list? If so, I\u2019d love to hear in the comments.<\/p>\n","protected":false},"excerpt":{"rendered":" As technology plays an increasingly important role in the business, IT departments are evolving. They\u2019re moving from a back-office function that supports the business to a true business driver. The problem is, many of these CIOs and IT leaders are still stuck working with limited budgets. IT budgets took a beating in the recession a …<\/p>\n
\n<\/a><\/p>\n1. Address the \u201clegacy architecture\u201d problem<\/h3>\n
2. Move to the cloud<\/h3>\n
3. Share services and products across teams<\/h3>\n
4. Look at long-term hardware\/software costs<\/h3>\n
5. Consider a \u201cBYOD\u201d strategy<\/h3>\n
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