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IT Budgeting

IT Budgeting: Cost Cutting Tips for Sustainability-Conscious CIOs

Now that businesses are emerging from the Covid-19 pandemic and beginning to feel that efforts can be stabilized on growth and development having exited a period of pure survival, a fresh spotlight on efficiencies and cost-cutting exercises has surfaced from senior management and shareholders. While for many years ‘transformational’ budget-saving opportunities have required cutting corners and investing in cheap alternatives to traditional products and services, there now exists a variety of potential for such changes to be made while maintaining a focus on sustainability; and here, Procurri highlights just some of the ways in which this can be achieved.

Aligning IT Budget Spend and Corporate Values with Sustainability

Of course, when presenting an IT budget, it is critical that the company’s top values and initiatives are considered and represented throughout, with clear value added from the IT department. Most businesses now have a set sustainability commitment and agenda (and if they don’t, they should!) – and the role IT plays in this often taps into legislative and best practice guideline adherence; meaning that senior buy-in is easy to achieve as its value is understood.

When working on a budget that’s aiming to both cut costs and boost a business’s CSR (Corporate Social Responsibility) credentials, it may be beneficial to discuss the value being added for each area of the business with their departmental leads: after all, many will assume that such win-wins don’t exist.

Capex vs. Opex

IT budget expenditure fits under two categories, Capex and Opex. Both have opportunities for decreased spend and increased sustainability focus, but they are different.

Capex is short for ‘Capital Expenditure’ and refers to the one-time costs for assets and resources contributing toward company operations for a year or more. In IT, this is usually the money invested into new computers, phones, or other hardware.

Opex is short for ‘Operating Expenditure’ and refers to the day-to-day costs of running the company. In IT, this usually includes software and security subscriptions, the rents on properties housing data centers, and the utility costs of such facilities.

Cutting Costs but Boosting Sustainability: Capex

The optimization of Capex spend can be made in four main ways:

Avoiding costly hardware refreshes When new hardware does need to be procured, the default approach for most is to buy the newest models of assets from the OEM. However, the purchase of refurbished and EOL hardware is considerably cheaper than that of newly manufactured and discourages overconsumption of hardware that’s created as a result of high environmental cost. Collaborations with firms such as Circular Computing provide remanufactured laptops with fault rates lower than that of brand-new hardware!

Consolidation of hardware Where data center equipment is being moved, consolidation can occur with careful planning that allows for the continuity of capacity and availability management. Where an all-inclusive relocation logistics service is being offered, efficiencies can be made through streamlining hardware, on-site spares provision, and the facility for specialist support.

Extension of asset lifespan When most assets reach the end of their OEM support provision (the EOSL point), many organizations simply scrap them and replace them with newer hardware in order to maintain OEM support services. Such practice is hugely expensive but also unnecessary. Third Party Maintenance services may be provided by companies other than OEMs, allowing for the continuation of seamless service and maximized uptime without the need for heavy investment, the disruption of new installations, and the need for further procurement (and sustainability impacts) of ITAD services for the now unwanted equipment. Extending the lifecycle of IT assets maximizes their value.

Efficient management of assets An increase in remote working worldwide has proved difficult for many organizations in reclaiming and tracking assets when employees travel, require new hardware, or leave the business altogether. The provision of a comprehensive asset reclaim program allows for easy returns, the monitoring of equipment worldwide, and ensures no loss or unnecessary spending as a result of temporarily misplaced hardware.

Cutting Costs but Boosting Sustainability: Opex

The optimization of Opex spend can be made in three main ways:

Lowering hardware maintenance costs While Third Party Maintenance services may help avoid large bills for the decommissioning and recommissioning of data center equipment, it also provides a great opex saving in ongoing maintenance fees. Maintenance services provided by non-OEMs can provide savings of up to 70% on server, storage, and network bills – and allow for the redirection of savings to cover other IT priorities to accumulate for later large purchases for more efficient cost center management.

Utilizing greater flexibility in IT contracts to adapt to changing requirements Companies offering independent maintenance and support for data centers that aren’t OEM-focused or biased are able to provide contracts in servicing that are considerably more flexible than those conventionally on offer. Taking advantage of such flexibility means that businesses can shift support levels and coverage timeframes depending on shifting circumstances and appetites. Short-term coverage and even hardware rentals can bridge coverage gaps when needed and offers respite from otherwise difficult-to-cover periods.

Ensuring comprehensive EOSL equipment support Maintenance support for hardware that has passed its EOSL point allows for the continuation of such equipment even where complex data center configurations exist which means not everything exits OEM support at the same. The flexibility that Third Party Maintenance services contracts allow for better control of the hardware lifecycle that includes comprehensive support as soon as OEM provision ends.

Where to get help with further IT Cost Cutting; without compromising on Sustainability

There’s a whole host of tips and tricks that businesses of all shapes, sizes, and types can implement to slash IT spending while staying true to their sustainability commitments. Get in touch with the Procurri team to discuss the areas of your IT budget that need attention and let us show you how you can save.

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