4 Steps to Beat Your IT Budget in 2023

A Gartner analysis forecasts that worldwide IT spending is poised to exceed $4.4 trillion. The two largest IT categories are software at $675 billion (up 9.8% from 2021) and IT services at $1.27 billion, an increase of nearly 7%. These trends suggest that a business’s success depends greatly on how effectively its IT department manages its budget.

IT budgets vary by company size. Smaller companies with less than $50 million in revenue typically have an IT budget of approximately 6.9%. This figure is higher than mid-sized companies (between $50 million and $2 billion) at 4.1% and larger companies (over $2 billion) at 3.2%. Although it is tempting to cut costs, it’s nearly impossible to compete in a software economy without a good IT team. So, we compiled four tips and tricks to help you manage your IT spending and save money.

#1: Switch to the Cloud

Cloud computing is here to stay. While migrating your organization’s data to the cloud can seem daunting, it can help you save money on your IT overhead by reducing the costs associated with maintaining and refreshing your server components. Cloud services can also be specifically tailored to the needs of your business. It’s easier to eliminate the services you don’t need and implement the useful ones. Microsoft’s Cost Management and Billing can help manage and analyze your cloud workload costs.

#2: Cut Out Unused or Unnecessary Software Licenses

It’s good practice to check for and remove unnecessary or unused licenses and subscriptions (learn how to remove Microsoft 365 licenses after NCE here). A Good software audit may help you find outdated software license costs that can quickly add up. An audit is also a good practice to determine what specific subscriptions could be upgraded or modified to better benefit the needs of your business. Because software licensing can be challenging to navigate, it’s best to call in the professionals. Contact Trusted Tech Team to schedule a walk-through with a Microsoft licensing engineer to ensure that your licenses are cost-effective.

“The pandemic drastically changed how work is performed. Before COVID-19, only about 8% of employees reported working exclusively from home, according to Gallup.”

#3: Upgrade Your Tech Stack

Sometimes reducing your IT budget requires a hard look at the technology itself. Even if your outdated network infrastructure works, it doesn’t mean that it should still be used. Upgrading technology and hardware may bring a steep upfront cost, but it will likely keep your future IT budget under control with more cost-effective and better-performing equipment. If the high upfront costs of tech upgrades are a little off-putting, consider temporarily reducing other expenses, such as office supplies, training, and travel.

#4: Consider a Hybrid- or Remote-Work IT Environment

The pandemic drastically changed how work is performed. Before COVID-19, only about 8% of employees reported working exclusively from home, according to Gallup. This number has grown to 39% in February 2022 - and is expected to stabilize at 24%. Remote work can help your IT budget by eliminating real estate costs, office supplies, taxes, office equipment, and janitorial services. In addition to saving money on overhead expenses, remote and hybrid work environments increase employee engagement by 3.7 times, reduce the likelihood of burnout by 68%, and reduce the likelihood of employees seeking new job opportunities by 55%, according to Gallup.

Keeping IT costs low doesn’t have to be an impossible mission! With the right strategies, you can quickly see significant savings in your budget. By following these tips, you’ll hopefully prep your business for 2023 and make the most our of your IT budget.