1. Reduce IT Spend at Small Enterprise Organizations
Strategy
Infrastructure
Applications
Security
For small and medium enterprises
Reduce IT Spend at Small Enterprise Organizations
Cut costs to prosper through a volatile economy.
Info-Tech's products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns.© Info-Tech Research Group

2. 52 % Do More with Less What does this mean?
of IT budgets are expected to remain the same or decrease in 2016.
Source: SpiceWorks, The 2016 State of IT
This mandate and expectation from the business is an unfortunate reality for many of Info-Tech’s clients.
What does this mean?
Leaner budgets
Increased operational efficiencies

3. Cost Control: painful, but a strategic opportunity.
Cost control is a necessary part of effective IT governance. It’s also a smart general business practice. Although not a fun process, smart cost control gives IT an opportunity to position itself well with an organization’s executive management.
In cases where cost containment is an enterprise-wide initiative, every department will likely need to pitch in, and it’s important for IT to play its part, even if it’s experiencing a disproportionate amount of budgetary reduction.
Treat cost cutting measures as an opportunity to create a more efficient and smarter department.
George Goodall,
Director of Small Enterprise Research
The VIP Boardroom at Info-Tech Research Group’s Toronto Office

4. Use the guidance in this research to help you carefully cut your IT budget
Intended Audience
IT leaders tasked with trimming their budgets
IT leaders and managers being mandated to reduce the total expenses incurred by IT
Expected Benefits
Clear capital and operational budget items to cut or decrease
Direction on how to smartly cut IT expenses without undermining IT capabilities
This Research Includes
Guidance for how to approach capital and operational cost cutting
Common items to explore when trimming an IT budget
WALK AWAY FROM THIS RESEARCH WITH:
Contact Info-Tech to book a call at
Immediate cost-cutting tactics
A plan for how to tackle larger and incremental expenses
Phone:

5. More IT leaders must undergo cost-cutting measures
The Reality
More IT leaders must undergo cost-cutting measures
Business or IT Driven? The important thing is they are happening.
Common Causes
1. You have no choice.
There are no safe harbors in an enterprise-wide storm of cost cutting. If senior management says that you have to cut IT costs, then you have to do it.
2. You want to be part of the team.
The business is IT’s key client. If the rest of the business is going through a cost-management initiative – and most business leaders think that they will – then IT should do its share, if only to maintain the confidence of the business.
3. You want to increase IT resilience.
Cost management gives you an opportunity to trim out weak parts of the IT organization.

6. REVIEW YOUR IT BUDGET AND OPERATIONS AND ASK:
Take a scalpel – not a machete – to your budget Cut Carefully and Conscientiously
Avoid undermining the performance of critical IT functions and disruptive services to the business.
When deeper cuts are required, get business buy-in for service and functional impacts.
REVIEW YOUR IT BUDGET AND OPERATIONS AND ASK:
What can be removed from IT’s budget without disrupting service or jeopardizing IT capabilities?
What cost-incurring actions can you freeze?
What pending expenses and initiatives can be delayed?

7. Review cost-cutting opportunities in IT’s operational and capital spend
Savings Considerations
Operational cuts have a bigger impact on the services you’re currently providing. These cuts will help you save money from your budget but they are more difficult to implement.
Capital cuts will impact services you are planning to provide.
OPERATIONAL
Operating Costs: Expenses incurred to run the organization. This type of spending is related to the provision of services.
In an IT environment, operating costs could include:
Labor
Hardware and software maintenance fees
Vendor services like cloud, network, etc.
CAPITAL
Capital Costs: Expenses (spending) incurred in order to buy things. This type of spending is normally related to the acquisition of assets.
Capital costs could include:
Purchasing equipment, software, etc.
Eligible internal and external labor
Entering into a capital lease
Note:
If the goal is to reduce the cost of IT, identify items that will result in actual savings or budget reductions first, rather than ones that deliver a cost avoidance.
Items that deliver year-over- year savings (recurring) provide the best long-term value.

8. When looking for budget savings, use a three-step process1 2 3
Short Term
First, focus on quick wins deliverable within one to three months of beginning a cost-cutting initiative.
Medium Term
Then, review medium-term savings. These initiatives take slightly longer but can be started and normally completed within a year.
Long Term
Finally, look at items that require significant effort to deliver and provide savings beyond 12 months.

9. Short-Term Cost-Cutting Tactics (1 to 3 Months)
SECTION 1
Short-Term Cost-Cutting Tactics (1 to 3 Months)
This Section Contains:
Attain Quick Wins
Avoid Costs
Reduce IT Services
Freeze Hiring
Review Invoices for Errors

10. NOTE PUT NEW DISCRETIONARY SPEND ON HOLD
Avoid Costs What spending can be avoided to generate some savings to the budget?
PUT NEW DISCRETIONARY SPEND ON HOLD
Remove discretional spend items from the budget unless they provide an in-year payback on spend.
EXTEND THE LIFE OF EXISTING HARDWARE ASSETS
Extending the useful life of assets defers the need to replace them.
CHARGE BUSINESS UNIT BUDGETS FOR SMALL IT PURCHASE REQUESTS
Charge the business budgets for small items such as second monitors, small shrink-wrap software packages, and phone accessories.
NOTE
These items are generated from analyst experiences and insight; evaluate the feasibility of these options for your organization before proceeding.

11. Reduce IT Services GUIDELINE Applicable Conditions WARNING
Reduce the quality or number of services that IT performs for the business. Try to focus on non- business-critical areas such as help desk and desktop support, however, major savings may arise from services that do impact the business.
Applicable Conditions
IT performs IT services.
WARNING
Many of the non-critical services, such as help desk, are very public. These service cuts may create friction with the business if not communicated properly.
POTENTIAL BENEFIT
MINIMUM EFFECTIVE INTERVENTION
Low – Medium
Review of all non-critical IT services.
GETTING STARTED
Review IT services such as help desk or desktop support.
Determine if the level of service can be reduced. Consider:
Reducing the hours of operation of the service desk
Increasing wait times
Provide more self-help tools
Eliminate after-hours support and paid overtime
Train business staff to provide support for small issue resolution.
Work with the business to identify areas where service level cuts will have the least impact or are acceptable.

12. Info-Tech Research Group Helps IT Professionals To:
Quickly get up to speed with new technologies
Make the right technology purchasing decisions – fast
Deliver critical IT projects, on time and within budget
Manage business expectations
Justify IT spending and prove the value of IT
Train IT staff and effectively manage an IT department
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