It is well known that information technology plays a key role in driving innovation and enabling companies to be more productive, resulting in a competitive advantage that fuels success and growth. As industries mature and markets tighten, evaluating and reducing total cost of ownership (TCO) is an effective way to improve your return of investment (ROI) and make sure that you are getting the most out of your investment. This blog post will explore five ways enterprises can reduce total cost of ownership in IT.
What is total cost of ownership?
When it comes to buying new equipment or software, the initial cost is just the tip of the iceberg. The total cost of ownership is the sum of all expenses related to purchasing, deploying, using, and disposing of a product or device. In other words, it is the real cost of a product or piece of equipment over the entire life span.
Businesses can use this data to make intelligent purchasing decisions, as it allows them to identify which assets are critical. An elevated TCO might indicate that certain assets have hidden costs or maintenance problems that will impact future spending.
1. Ensure your investment meets your business needs
First and foremost, you must assess how your technology solution meets your actual needs. You should ask yourself, “Does the system cover all of our business requirements?” You should also consider whether the technology will be able to continue fulfilling those needs as your organisation grows. It’s important to keep in mind that technology is not a one-time purchase. Choosing the right solution for your business means investing in technology that will continue to meet your needs over time.
2. Leverage cloud services
Cloud services can help you reduce your total cost of ownership by taking some of the costs of maintaining and managing certain systems off your plate. Deploying certain applications, such as email, software, and data storage, in the cloud can reduce the amount of IT infrastructure and personnel required to support and manage those systems.
Another way cloud services can reduce total cost of ownership is through the ability to pay only for what you need, when you need it. Cloud providers typically offer a pay-as-you-go model, so you can scale up or scale down your use of their services when necessary. This means you can reduce your technology spend when you don’t require as much power or storage. You can also reduce your downtime expenses since many cloud providers also provide 24/7 support.
It’s important to keep in mind that not all cloud offerings are created equal. Just because something is offered as a cloud service doesn’t mean that it’s the best one for your organisation. Make sure you choose the right cloud services for your organisation.
3. Utilise Software as a Service (SaaS)
Using software as a service (SaaS) can not only help you reduce your technology costs, but it can also give you access to more advanced technologies. SaaS provides a subscription-based service that allows you to access software without having to purchase and maintain the software directly.
Depending on the nature of the software, using SaaS can reduce the capital costs associated with purchasing and maintaining the solution. It can also help you reduce your operating costs by integrating seamlessly with your existing systems and reducing your need for IT resources.
4. Network equipment optimisation
Many organisations are slow to replace their hardware because they don’t want to deal with the related costs. While the cost of equipment is visible, the impact it has on your network’s performance is not always so clear. Network optimization can improve the functionality of your on-premises and cloud networks, helping to alleviate performance bottlenecks and reduce latency.
In addition to performance benefits, network optimisation can also help you to reduce your overall power consumption. This can save you money by reducing the amount you have to spend on energy. A network optimisation solution will monitor the performance of your network, identifying areas of potential improvement. It can also provide insights into how your network is being used, helping you to optimise your existing hardware.
5. Be selective with new technologies
Finally, one way to reduce your total cost of ownership is to be selective with the technologies that you adopt. Although it’s important to stay current with emerging technologies, you don’t necessarily have to adopt every new technology as soon as it becomes available.
Before you decide to invest in a new technology, make sure you understand its benefits, associated costs, and how it will fit into your business. Be mindful of the effect a new technology will have on your organisation’s total cost of ownership. If you can successfully reduce your total cost of ownership, then you’ll be able to maximise the ROI of your technology investments.
Reduce your total cost of ownership with IT experts
A business’s decision to invest in technology is a major one but it is important to make the wisest choice in light of your current and future needs, so you reap the benefits for the long-term. The Virtu IT procurement specialists can assist you in choosing the most suitable technology for your business, increasing your return on investment.