IT departments play a crucial role in the functioning of a business organization. They keep business operations running, protect critical data, prevent security threats, ensure network performance, and more. Due to this, IT is one of the most expensive departments in an organization. When businesses look for cost-cutting opportunities, oftentimes IT departments also come under the hammer.

Arbitrary, undisciplined cost-cutting brings more damages than benefits for an organization. Hence, a strategic approach to cost-cutting is essential if businesses do not wish to compromise on their performance.

Though according to Gartner, global IT spending is expected to increase by 3.7 percent in 2020, concerns over the recession and economic slowdown are still looming across the world. So, it is good for all businesses to streamline their IT operations and boost their efficiency.

This article discusses the top 6 hacks you can use to shrink your IT budget without affecting your business performance.

1. Achieve operational efficiency

The first and foremost thing to do in strategic cost-cutting is to improve the operational efficiency of your IT department. You need to analyze your IT infrastructure to check if you are using your resources wisely. Always, make sure you are using the right technology that adds value to your business. Also, cut down on discretionary spending in your IT department. By streamlining your business operations, you can save a lot more on IT expenditure than you can imagine.

2. Look beyond branded hardware equipment

Most of the large enterprises opt for branded hardware equipment as they can easily afford them. However, the same cannot be said about small and mid-sized businesses that are trying to use their IT budget wisely. It is possible to save up to 50 percent of your hardware costs by opting for a brand that is not yet popular in the market. As long as the specifications are right, the brand name will not be a constraint when it comes to running top-notch software products.

If you are going to off-brand equipment, make sure you do your research to ensure the quality of the products. Some off-brand products give you brand-level performance for nearly half the price. By choosing the right hardware products, you can save a fortune on your IT spending.

3. Try virtual servers

Businesses are switching to virtual servers as they can add a lot of value to their operations. You can save a lot of money with virtual servers in the long run. Physical servers occupy a lot of space, and they are not fully utilized very often. Moreover, you must invest additional money in periodic maintenance, cooling, ventilation, etc.

Virtual servers can be costlier during the initial set up. However, they come with value-added benefits that can save money over time. As your business expands, adding new virtual servers will be more cost-effective than adding physical servers. Your energy costs and maintenance costs can be considerably minimized when using virtual servers.

4. Try outsourcing your IT

Maintaining an internal IT department is a costly affair unless you are a large corporation. So, most small and mid-size organizations now outsource their IT needs to managed service providers (MSPs) who have expertise in this field. By outsourcing your IT needs, you can easily reduce your labor costs, boost efficiency, minimize risk, and ensure compliance.

MSPs can monitor your IT infrastructure 24/7 and proactively fix alerts before any actual issues occur. This can save your business from costly unplanned downtime. Most MSPs also have flexible pricing bundles that allow you to choose services based on your IT budget and needs. In addition to cost benefits, MSPs can also improve the overall efficiency of your IT and boost productivity.

5. Use your manpower smartly

For companies that have an internal IT team, a significant percentage of their IT budget is spent on salaries of staff. This does not mean that you should layoff your IT staff right away. Rather, you need to understand how to utilize these resources smartly. Hire staff only when it is necessary and think about ways you can automate your IT functions. With modern IT technology, the entire IT infrastructure of a large organization can be successfully monitored with only a few IT professionals.

6. Use cloud data storage

Since data is one of the most valued commodities in this digital age, businesses spend a huge amount every year in securing their data. Instead of having a physical data center, you may opt for cloud-based data storage to bring down your storage costs. It is estimated that transitioning to the cloud will cut down your data storage costs by two-thirds. Moving to cloud storage can also improve data security and ensure seamless business operations.

Performance must be the focus

Shrinking your IT budget is not about switching to cheap solutions. Your key focus must be on performance. When planning your IT budget, do not go for short-term solutions that do not add value to your business. Instead, focus on long-term solutions that add to your performance without burning a hole in your pocket.