{"id":15168,"date":"2023-05-22T14:23:35","date_gmt":"2023-05-22T14:23:35","guid":{"rendered":"https:\/\/www.walkme.com\/blog\/?p=15168"},"modified":"2023-05-22T14:23:35","modified_gmt":"2023-05-22T14:23:35","slug":"it-cost-reduction-playbook-how-to-eradicate-it-costs-the-smart-way","status":"publish","type":"post","link":"https:\/\/www.walkme.com\/blog\/it-cost-reduction-playbook-how-to-eradicate-it-costs-the-smart-way\/","title":{"rendered":"IT Cost reduction playbook: how to eradicate IT costs the smart way"},"content":{"rendered":"\n<p><span style=\"font-weight: 400;\">CIOs and CFOs must balance the books daily in a rapidly changing market, but cutting labor costs doesn\u2019t have to mean losing staff. Generating revenue with fewer resources is a vast challenge, but it is possible.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img height=\"519\" width=\"1024\" decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/When-Gartner-surveyed-CFOs-in-July-2022_6653b98a.jpg?w=1024&#038;h=519&#038;crop=1\" alt=\"When Gartner surveyed CFOs in July 2022\" class=\"wp-image-16154\" srcset=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/When-Gartner-surveyed-CFOs-in-July-2022_6653b98a.jpg 1200w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/When-Gartner-surveyed-CFOs-in-July-2022_6653b98a.jpg?resize=300,152 300w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/When-Gartner-surveyed-CFOs-in-July-2022_6653b98a.jpg?resize=1024,519 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><b>When <\/b><a href=\"https:\/\/www.gartner.com\/smarterwithgartner\/7-cost-reduction-mistakes-to-avoid\" target=\"_blank\" rel=\"nofollow noopener\"><b>Gartner<\/b><\/a><b> surveyed CFOs in July 2022, 66% said they planned to increase investment in digital technology in the ensuing 12 months, and another 32% said they would maintain such spending<\/b><span style=\"font-weight: 400;\">. With such high spending, optimizing investment is essential to avoid wasted resources and growth opportunities.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Utilizing IT cost reduction effectively allows you to <\/span><b>spend low<\/b><span style=\"font-weight: 400;\"> and <\/span><b>acquire high<\/b><span style=\"font-weight: 400;\"> profits without compromising <\/span><a href=\"https:\/\/www.walkme.com\/glossary\/employee-retention\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">employee retention<\/span><\/a><span style=\"font-weight: 400;\"> as you reduce personnel costs strategically without losing staff.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">As part of our IT cost reduction playbook to show you how to eradicate IT costs the intelligent way, we cover the following topics:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400;\">What is IT cost reduction?<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Why is IT cost reduction important?<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">Who is in charge of IT cost reduction<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400;\">IT cost reduction practical methods<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><b>What is IT cost reduction?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">IT cost reduction is finding ways to save money in the IT budget, also called IT cost optimization. Organizations can use saved money to make the budget smaller or get new technology to promote growth.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Why is IT cost reduction important?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Due to inflation and the possibility of a recession caused partly by the <\/span><a href=\"https:\/\/www.theguardian.com\/business\/2023\/mar\/17\/why-silicon-valley-bank-collapsed-svb-fail\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">SVB collapse<\/span><\/a><span style=\"font-weight: 400;\">, organizations are under pressure to cut costs in the short term. This point is valid even if they intend to implement technology in the future to lower their operational expenses and stay ahead of competitors by reducing energy and hardware costs and other IT areas.&nbsp;<\/span><\/p>\n\n\n\n<p><b>The dilemma for CIOs is finding ways to minimize the impact on the business&#8217;s long-term health while cutting costs.<\/b><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"505\" width=\"1024\" src=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/The-dilemma-for-CIOs-is-finding-ways-to-minimize-the-impact-on-the-businesss-long-term-health-while-cutting-costs_2653b99a-1024x505.\" alt=\"\" class=\"wp-image-16159\" srcset=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/The-dilemma-for-CIOs-is-finding-ways-to-minimize-the-impact-on-the-businesss-long-term-health-while-cutting-costs_2653b99a 1200w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/The-dilemma-for-CIOs-is-finding-ways-to-minimize-the-impact-on-the-businesss-long-term-health-while-cutting-costs_2653b99a?resize=300,148 300w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/The-dilemma-for-CIOs-is-finding-ways-to-minimize-the-impact-on-the-businesss-long-term-health-while-cutting-costs_2653b99a?resize=1024,505 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><span style=\"font-weight: 400;\">According to our <\/span><a href=\"https:\/\/www.walkme.com\/content\/the-state-of-digital-adoption-2022\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">State of Digital Adoption 2022-23<\/span><\/a><span style=\"font-weight: 400;\"> report, <\/span><b>companies wasted USD 16 million in 2022 on duplicate and unused software<\/b><span style=\"font-weight: 400;\"> alone, highlighting the need to reduce costs in IT to eradicate waste.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Who is in charge of IT cost reduction?<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">You might assume that the CIO (chief information officer) or the CFO would charge IT cost reduction. But in truth, although these roles formulate and coordinate cost-saving strategies, IT cost reduction is the responsibility of every company member to implement into all processes to ensure it is successful.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">When everyone works together and is mindful of the best methods to reduce IT costs, organizations make savings and can invest in growth for the benefit of every individual.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>IT cost reduction practical methods<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">It is essential to look at practical methods to implement IT cost reduction successfully. It is helpful to separate these methods into tools and strategies to ensure you implement each one methodically.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Tools<\/b><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img height=\"593\" width=\"1024\" decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Tools_6653b98d.jpg?w=1024&#038;h=593&#038;crop=1\" alt=\"IT cost reduction practical methods Tools\" class=\"wp-image-16156\" srcset=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Tools_6653b98d.jpg 1200w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Tools_6653b98d.jpg?resize=300,174 300w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Tools_6653b98d.jpg?resize=1024,593 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><span style=\"font-weight: 400;\"><\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Let\u2019s begin with the tools of IT cost reduction practical methods.&nbsp;<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Applications<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">Application management is a large part of any successful IT cost reduction project. Ensure you end your subscription to unused apps, constantly research new ones, and continue to collect number and experience-based feedback from employees about usage and their views on usefulness. Doing so will ensure you only use the best apps, reducing waste and boosting productivity.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">The best way to ensure staff learns how to use a new app is to use a digital adoption platform (<\/span><a href=\"https:\/\/www.walkme.com\/digital-adoption-platform\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">DAP<\/span><\/a><span style=\"font-weight: 400;\">), which contains in-app guidance and personalized learning tools to optimize adoption, <\/span><a href=\"https:\/\/www.walkme.com\/blog\/reduce-it-costs\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">mitigate risk<\/span><\/a><span style=\"font-weight: 400;\"> and reduce costs. We found that <\/span><b>our DAP delivered a projected 368% ROI in one study<\/b><span style=\"font-weight: 400;\">.&nbsp;<\/span><\/p>\n\n\n\n<p><a href=\"https:\/\/www.youtube.com\/watch?v=9638p1NX4Tk&amp;pp=ygUKd2Fsa21lIGRhcA%3D%3D\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">WalkMe&#8217;s DAP delivers a projected 368% ROI!<\/span><\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Vendors<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">To save money, streamline your vendors by canceling subscriptions to <\/span><a href=\"https:\/\/www.walkme.com\/glossary\/digital-tools\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">digital tools<\/span><\/a><span style=\"font-weight: 400;\"> provided by vendors that provide services offered by other apps in your portfolio as part of your cost reduction initiatives. Ensure the amount of money you spend on a vendor matches the importance of the project, application, or service they support to reduce software licensing costs.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">And finally, hold everyone accountable by having a centralized view of all your vendors.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Labor<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">What a company need to keep in mind because of the big picture and are being <\/span><b>influenced indirectly &#8211; <\/b><span style=\"font-weight: 400;\">these are the things investors &amp; the market is looking at the company need to think about it and keep it in mind because it can change, and it\u2019s not always in the company\u2019s power to change those things.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Look at the cost of staff for different apps, places, and job roles. Use this info to decide if you should wait to hire someone or move people to various locations that cost less money. Terminating your staff\u2019s contracts is a last resort for their livelihood and company growth.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Change how you use your resources when you make changes to the app or business plans so it does not cause too much trouble.<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><b>Strategies<\/b><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img height=\"721\" width=\"1024\" decoding=\"async\" loading=\"lazy\" src=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Strategies_54653b99.jpg?w=1024&#038;h=721&#038;crop=1\" alt=\"IT cost reduction practical methods Strategies\" class=\"wp-image-16157\" srcset=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Strategies_54653b99.jpg 1164w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Strategies_54653b99.jpg?resize=300,211 300w, https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/10\/IT-cost-reduction-practical-methods-Strategies_54653b99.jpg?resize=1024,721 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><span style=\"font-weight: 400;\"><\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Next, let\u2019s look at IT cost reduction strategies.&nbsp;<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Focus on immediate impact<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">Focus on cutting down or temporarily halting expenses that will have a noticeable effect in the short rather than the long term. Consider targeting monthly or quarterly payments instead of annually.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Projects<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">To reduce operating costs and free up resources, prioritize investments into &#8220;run,&#8221; &#8220;grow,&#8221; and &#8220;transform&#8221; projects. Doing so will help identify which tasks can be suspended or restructured. It&#8217;s also essential to include run costs in the financial plan and report them explicitly so that the impact on individual cost centers is clear for future budget planning.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Focus on resources<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">Explain how each business unit&#8217;s IT budget translates into specific IT services. The more a business unit consumes IT services, the higher its IT spending will be. Encourage behavior changes that can reduce overall IT costs.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Ensure that IT projects and investments are aligned with business goals and supported by key personnel to allow you to reduce IT costs in tandem with the business. Use IT spend per employee benchmarks to identify any areas of excessive spending.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>The first cut is the deepest<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">Organizations often fail to make sufficient cuts deep enough the first time, resulting in the need to revisit costs and repeat the process. A recent Gartner analysis (cited above) shows the need for IT cost reduction as it found that only <\/span><b>43% of leaders achieve the level of savings they set out to in the first year of cost reduction<\/b><span style=\"font-weight: 400;\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Doing so leads to a harmful and ineffective cycle of unpredictability, labor, and reduced productivity. These effects are hazardous in staff reductions that may undergo recurring downsizing processes.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400;\">Ensure your first cut is the deepest to avoid inefficiencies further into the project cycle.&nbsp;<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><b>Target expenses you have not yet acted on<\/b><\/h4>\n\n\n\n<p><span style=\"font-weight: 400;\">It is essential to consider if you can recover payments and return prepayments to avoid waste. The first impact will be on charges that you have not committed to. Check the contracts for provisions related to renegotiation and termination.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><b>Reduce IT costs with a DAP<\/b><\/h2>\n\n\n\n<p><span style=\"font-weight: 400;\">Reducing IT costs is an essential part of any organization\u2019s IT strategy. By making it part of your company culture, you can encourage staff at all levels to implement IT cost savings into every process.&nbsp;<\/span><span style=\"font-weight: 400;\">Another crucial component of any cost reduction strategy is a digital adoption platform. It enables businesses to train their staff in a personalized way with in-app guidance, saving resources on staff-to-staff training as the team learns at their own pace. Using a DAP can help you reduce IT costs, freeing up resources for growth, improvement, and <\/span><a href=\"https:\/\/www.walkme.com\/glossary\/digital-resilience\/\"><span style=\"font-weight: 400;\">digi<\/span><\/a><a href=\"https:\/\/www.walkme.com\/glossary\/digital-resilience\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">tal resilience<\/span><\/a><span style=\"font-weight: 400;\"> for the future.<\/span><\/p>\n\n\n<a href=\"javascript:;\" class=\"popup-threefields m-element-hidden j-initiator j-paid_post_feature\" id=\"imgpng\" form-type-id=\"imgpng\"><img decoding=\"async\" class=\"initiator-image\" src=\"https:\/\/www.walkme.com\/blog\/wp-content\/uploads\/sites\/2\/2023\/04\/Data-integrity-A_16643bf1.png\"\/><\/a>\n","protected":false},"excerpt":{"rendered":"CIOs and CFOs must balance the books daily in a rapidly changing market, but cutting labor costs doesn\u2019t have to<span class=\"moretag\">&#8230;<\/span>","protected":false},"author":246,"featured_media":15169,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"mobile_image_id":0,"tablet_image_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7327],"tags":[437,7573,7454,110,254],"class_list":["post-15168","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital-adoption","tag-dap","tag-digital-resilience","tag-digital-tools","tag-digital-transformation","tag-employee-retention"],"acf":{"__coauthors":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - 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