IT budget

How to Optimize IT Spend with a Limited Budget

As the pandemic continues to paralyze businesses and society worldwide, it’s more important than ever to remain forward-thinking in your IT strategy and maximize the impact of the organization’s IT budgets.

From the dot-com bubble burst to the 2008 financial crisis, disruptions have hindered IT strategies for years. IT leadership must look at these disruptions as an opportunity to pivot, change, and enhance the agility of your current organization. History has proven that companies that continue to invest in their IT strategy, while balancing short-term efforts with long-term measures, emerge more competitive.

The nature of the current pandemic has significant short-term budget impacts and will fundamentally change the financial framework of any business. When less must be more, it’s essential to allocate IT resources intelligently and creatively.

Here are the top 4 strategies to maximize the impact of your organization’s limited IT spend:

1. Work with executive leadership to align IT with strategic growth and operational efficiency opportunities

Work with your executive IT steering committee to focus on identifying impactful priorities and investing in them.

  • Explore growth opportunities such as new service lines
  • Examine organizational efficiency initiatives, such as internal communication processes, understanding the strengths and weaknesses of different professionals and quality of management
  • Analyze revenue cycle initiatives

A critical success factor is to defer low priority projects to maintain focus and accelerate timelines of high impact priorities. Easier said than done.

Recommended reading: 19 Tips to Avoid Cost Overruns on Projects

2. Understand that IT vendors and service providers are in the same situation and are ready to deal

As everyone is facing this pandemic together, now is a great time to reduce your operational spending and solidify your IT service provider partnerships, or develop new ones. Revisit your existing IT cost framework and work with vendors to creatively reduce your short- and long-term costs.

  • Revisit your high-cost IT service provider agreements, especially long-standing agreements to ensure that pricing packages reflect the current marketplace
  • Explore no interest financing packages for your capital project investments with extended amortization schedules
  • Revisit your IT architecture and services framework to consolidate and/or eliminate components and evaluate utilization and unused capacity
  • Quickly gain an understanding of the current marketplace for on-premises/off-premises options and IT service packages/cost models

It can be difficult to tackle this if you have a longstanding relationship with your IT service provider, and it does take time to identify and execute on high impact opportunities, but the cost-savings will be well worth the effort.

3. Prepare your organization to make the pivot and ensure long term viability

Now is also the time to be thinking about the long-term, even when immediate solutions are needed. You’ll make the most of your IT budget both in the short- and long-term if you avoid shortcuts and instead implement lasting strategies.

  • Understand the short term and long-term pivot capabilities such as remote staff collaboration tools and work from home capabilities
  • Understand your readiness to enable these pivot capabilities and the cost to close short and long-term gaps
  • Using the first two strategies, align these IT initiatives with your organization’s priorities to enable – in a timely manner – these pivot capabilities

These pivot technologies are best implemented in a phased approach to enable immediate capabilities and allow you time to implement underlying IT infrastructure improvements to evolve and implement the longer-term strategy and capabilities.

4. Plan ahead for the next potential disruption

One of the bigger mistakes IT leaders can make is a lack of planning, which increases the risk of draining IT resources and budget. Disruptions aren’t always predictable, but if this pandemic has taught companies anything, it’s to be as prepared as possible. To prepare for IT disruptions, there is one key initiative the organization should prioritize:

  • Create a disaster recovery solution, which involves a set of policies, tools and procedures that enable the recovery or continuation of vital technology infrastructure and systems following a natural disaster or human-induced error. Leaders must put a workable DR plan with proper documentation in place to reduce the chance of decreasing customer satisfaction and revenue during moments of unpredictable system failure. We know there is no shortage of priorities, and DR plans tend to be a lower one because there isn’t an immediate benefit, but it is vital senior leadership understand the importance of being prepared for a potential system loss.

IT leaders have been met with the strenuous task of continuing to meet an organization’s aspirations when saddled with limited budgets amid a pandemic. With IT leadership productively collaborating with their executive team, organizations are able to weather the immediate crisis and pivot to support the organization’s new model in the long run. 

Share your thoughts