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Where You Should and Shouldn't Cut Software Costs

By Jenn Fulmer Print this article Print
 
 
 
 
 
Woman putting money into a piggy bank after cutting software costs.

IT is expensive to manage and costs are on the rise as remote work becomes the norm. Your business needs more cloud-based software to enable your employees to access the tools and data they need. While it may be tempting to migrate all of your current software to the cloud, that can be both expensive and time-consuming. To make your IT costs easier to manage, we’ve made a list of where you should and shouldn’t cut software costs.

Reducing IT costs through software

Ways you should cut software costs

Finding good ways to reduce software costs is all about cutting waste. Here are a few places you can do that in your IT department.

Audit your current software licenses

Review all of the current software licenses your company is paying for and make sure you’re not paying for more users than you have. As employees leave, companies sometimes forget about all of the software licenses they were using and may not cancel every one of them. You may be paying for several more licenses than you need, and reducing them could save you quite a bit of money each month.

Retire unused software

Similarly, unused software can eat up a large portion of your IT budget. Maybe you started a free trial and decided it wasn’t right for you, but you didn’t realize you needed to actually cancel it to prevent monthly charges. Or maybe you’ve just slowly stopped using a platform as you found other tools to be more useful. Either way, it’s easy to accidentally continue paying subscriptions on services you’re not using anymore.

Bundle software when possible

Small businesses generally prefer standalone software over larger suites because they’re cheaper and easier to implement. However, as your company grows, the number of software platforms you’re using increases as well. Take another look at those big software suites and see if they might actually save you money. Plus, software suites provide a more cohesive view of your business because the different tools don’t rely on APIs to work together.

Ways you shouldn’t cut software costs

Budgeting is important, but the bottom line shouldn’t get in the way of your employees’ productivity, especially when efficiency can lower your operating costs even more than you'd save by cutting software that's being put to good use. Here are a few ways you shouldn’t try to cut software costs.

Don't switch to cheaper versions of current software

If you really like your current software but don’t love the cost, looking for cheaper versions of that software probably won’t serve you as well as you think it will. For one, your employees will have to learn and implement a whole new system, which can take quite a while. The new software also may not include all of the features that your old one did, interrupting long-standing processes. If you need to cut costs, reach out to your current vendor and see if they can help you out or if there’s a part of the software you’re not using that may allow you to drop to a lower plan.

Don't try to develop software yourself

If you’ve ever worked on a software development project, you know how costly and time-consuming it can be, even with the use of low code platforms. Unless you have very specific needs for custom software that doesn’t currently exist on the market or your team has a lot of development experience with the tool you want to build, developing your own software is not a path to a lower budget. Not only will your upfront costs be tremendous, but your operating costs will skyrocket as you pull your IT team away from other projects. And that’s not to mention the level of risk you’ll take on trying to develop the application yourself.

Also read: Buy vs. Build Software Applications: The Eternal Dilemma

Don't cancel software your team actively uses

If your team is actively using software and it’s making them more efficient, don’t cancel it. You’ll interrupt their processes and force them to find new ways to get their job done, frustrating them and decreasing their efficiency. This will spike your operating costs, and it could also lead to an increase in hiring costs if your employees decide the frustration isn’t worth it.

Also read: How to Keep Your Overburdened IT Staff from Burning Out

Other places to reduce IT costs

Software isn’t the only place to reduce your IT costs. If you run data and applications on the cloud, make sure that you’ve optimized your cloud resources and are using reserve instances whenever possible. For on-premises data, use containers to partition your servers and maximize the space you have. You should also consider virtualizing your databases.

IT is one of the most expensive departments for many companies, but the cost is well worth it. If you do need to reduce your costs, make sure you’re keeping your employees’ needs in mind. Don’t make decisions that will impact their daily operations without at least talking to them about it first and getting their input. Try to make cuts without interrupting their work first, and, if you still need to cut more, work with them to find a satisfactory solution.

Read next: IT Spending and Practices in a COVID-19 World



 
This article was originally published on 2021-06-01
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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