Businesses are adding more and more technology to everyday tasks. While this technology can be justified it does create additional costs. Business owners are always looking for ways to reduce IT costs and there are certain ways to approach reducing these costs without giving up efficiency. When managing IT costs it is important to remember that efficiency plays a crucial role in success. There are four main beginning steps to take when considering reducing IT costs – these steps are determine what you need, manage your IT department, consolidate costs, and negotiate current contracts. While these are the beginning steps to reducing IT costs, there are more extensive programs and software available such as virtualization.

The first step in reducing IT costs is to evaluate what you have in the way of technology and determine what you truly need. Determine if you have things that do similar functions that could be reduced. To perform this step correctly it is important to conduct an audit of all hardware, software, computers, and other technology. Some may consider using not fully up-to-date software or hardware. Another important step in reducing IT costs is managing your IT department. Management within the IT department not only assures that things are being done efficiently but also that everyone is doing something and money is not going to waste. It is also important to be sure that you do not have multiple people doing the same thing in an unnecessary capacity. Another way to manage your IT department is to specifically train employees in different fields – allowing more work to be completed in less amount of time.

The next step in reducing IT costs is consolidating. There are several ways to go about consolidating – for example having numerous contracts with numerous vendors, when you could be working directly with only a few. In this case each vendor would be charging his or her own delivery and shipping costs, which may not seem like much but it can add up. Businesses are also often offered special bundle pricing for hardware and software that is bought in large quantities. Some businesses opt to use virtualization software that presents with more upfront cost but can save more annually. Another way to save money in the IT department is to negotiate existing contracts or to come up with an agreeable payment plan that would allow for better financial flexibility. Contracts with vendors and clients are important but it is also crucial to remember the importance of the IT department.

There are several other ways to consolidate costs in the IT department such as reducing cooling and power needs, optimizing multi-sourcing programs, and enforcing It assessment. A more popular option as mentioned before is virtualization, a process where software is duplicated in-house without needing to purchase several licenses for the product. It is important to remember that cost reduction can happen without the sacrifice of efficiency. In reducing IT costs, a business can dedicate the funds to other programs and departments that can help the company develop.