With the potential for an economic downturn (one which some might argue we are already in); companies are faced with the pressure to cut costs in multiple areas.
Technology seems to be a favorite area for companies looking to reduce expenses, whether that be in the form of delayed purchases or a reduction in budgets. This is especially challenging in the current environment where internal clients are looking for enhanced support for mobility, SaaS applications, and numerous devices and platforms.
Yet, IT teams are still being called on to support upgrades, new innovations, changes in infrastructure, and heightened security concerns. It's difficult to manage your technology environment and find where expenses can be cut without diminishing value or productivity.
The first step in taking control of your environment and cutting costs is to know what is in your environment and where you are acquiring expenses. Below are potential areas where operational expenses tend to creep up on businesses.
Rapid Advancements, Solutions, and Capabilities
Operational expenses are increasing within the area of advancements in technology, and they are rapidly changing and expanding with more options than ever to choose from. Although having options is great, it also comes with confusion and can be overwhelming. That confusion deepens when all the solutions and vendors tend to look alike because they all have similar offerings. On top of that, the solution sets come with more capabilities than what you need or are aware of, quickly blurring the lines in keeping track of what solutions you have in place.
Once this happens, managing your environment and solution-tracking tends to get complex and can often get neglected which leads to a lack of visibility. That lack of visibility will cost you more in the long run, leaving you unaware of the services you are paying for, doubling up on the same solutions across different platforms, and creating gaps in your environment.
Platforms Reaching Obsolescence
With technology solutions rapidly evolving, businesses have an added pressure to acquire the latest solutions in order to stay relevant and keep pace with their competitors. If they don't keep pace, there is a risk of losing both revenue and relevancy in the market. Conversely, since businesses are accruing solutions at a faster pace, it is leading them into deeper tech debt. Whether it's computing, infrastructure, or voice and collaboration, many businesses are struggling with how to transition from outdated platforms due to the weight of this debt from previous investments.
Security & Hybrid Solutions
During the COVID pandemic, companies had to quickly adapt to shifts in work environments involving hybrid and remote workers as well as provide new technology solutions (not to mention bring-your-own-device - BYOD) to support those resources. These solutions changed many companies' infrastructures and technology environments.
Although there are positives to a hybrid/remote work model, it greatly increases risk and complexity, especially around security. Security risks associated with this type of work model include an uptick in endpoint attacks, unsecured Wi-Fi, personal devices, and more.
All these potential areas of threat cause many executives to anxiously add on as many security enhancements as they can without knowledge of how the solutions work together. Without a strategy around your security solutions, your sense of safety may be leaving you blind to security loopholes in your environment and costing you more than you bargained for.
Resource (Headcount) Restraints
Following the abundance of layoffs that occurred during the COVID pandemic, many workers chose to simply not return to their jobs after the regulations tapered. As a result, many organizations find their current staff is doing more with less.
To offset lower staff numbers, companies have opted to pay for more technology solutions like contact centers, AI, and automation to supplement jobs. Although this is a strategic alternative and the technologies have proven to significantly decrease headcount hours, there are still costs, implementation, and management hours that present a new set of challenges for staff.
Having visibility into your environment and its expenses will help identify areas where you can cut costs, realize areas of overlapping services, and see any other potential gaps. Once you have visibility, strategies involving third parties, governance, and trusted partners can help reduce expenses while also promoting continued visibility, success, and productivity. Now that we have analyzed potential areas where operational expenses are rising, let's look at the top strategies for managing OpEx.
Here are the top strategies for managing OpEx spend:
1. Leverage Third Parties
With staff being overwhelmed with the amount of work they are doing, it may be beneficial for businesses to leverage third parties to do the mundane tasks. Some of these tasks could be help desk, patching, etc. Offloading these responsibilities to third parties can relieve staff of their workload and provide a cheaper alternative. Additionally, this will allow staff to be more productive and focus on strategic initiatives in their roles, increasing employee satisfaction.
2. IT Governance
Do you have a governance process for your technology environment? If so, how often are you assessing the solutions you have in place? If not regularly checked, services can overlap, costs can increase, and visibility is lost in terms of what is in your environment.
A governance process needs to be in place so that you can have knowledge of:
What toolsets are in place already
Understand how they work together within your environment
Identify which toolsets/solutions you no longer need
How to best utilize what you have in a strategic and effective way
Having a governance process in place will not only increase visibility but will enhance the communication between staff and IT departments and promote a stronger and more sustainable landscape.
3. Engage a Trusted Partner
Engaging a trusted partner can give you a leg up against your competitors because a trusted partner has your best interest and expertise. A partner with knowledge can negotiate services at more competitive rates, giving you a higher potential for lower out-of-pocket costs. They can simplify your vendor relationships with one point of contact, escalate issues with vendors on your behalf, and provide current technical knowledge to advise on the best solutions for your environment and business goals. These relationships should provide for net cost savings, and in many cases, can take their compensation from the solution providers or from savings generated.
Economic pressure can be a large pain point in organizations as they work to minimize costs while attempting to continually achieve success and maintain productivity. Although lowering expenses is needed in a downturn, it is important to understand your environment and the impact cutting costs and services has on your business. With third parties, governance processes, and trusted partners, businesses can innovate and find strategies to be positioned for success when things turn.
Serviam’s process is simple.
We listen and assess your unique telecom situation.
We guide you through a custom roadmap to better technological and contractual solutions.
We manage your transition so you have the best possible experience.
We stay with you to make sure your vendors continue to support your ever-changing business requirements.
Our Telecom and IT Vendor Management service goes far beyond managing costs or negotiating contracts. We guide you through a holistic, future-forward telecom strategy for your company and provide you with a long-term partner who manages your vendor relationships so you can focus on the road ahead.