Have you ever wondered how you can reduce your business expenses? It’s no secret that today, IT spending (infrastructure, development, testing, etc.) takes up a significant portion of most companies’ total expenses. For young startups, large investments in information technology are usually out of reach, so it’s necessary to learn how to optimize your budget.
For example, consider delegating work to specialists instead of hiring your own team. That’s why many entrepreneurs choose to cooperate with a nearshore software development center to get comprehensive services from leading experts in nearby regions or countries. This way, you can get a quick start without a significant investment. In this article, we would like to present you with more useful tips aimed at saving your budget!
1. Rent instead of expensive one-time purchases
There are numerous financial experts and billionaires who often emphasize that it is always preferable to utilize something temporarily rather than purchase it. For example, Elon Musk is one of the most prominent examples of a billionaire who prefers regular rentals over owning real estate. There are many reasons why renting is better than buying. The same applies to the field of information technology. Move to usage and subscription packages. SaaS turns large capital spikes into fixed operating expenses, provides support and updates, and eliminates shelfware.
Prefer either per-user or per-feature levels to allow a team to scale. Negotiate downgrade rights terms on a yearly basis and have a reminder of the same to prevent auto-renewing bad pricing. Track usage and license forfeiture fast on changing jobs.
The same with infrastructure. Use leasing devices, adopt IaaS to bursty loads, and use pay-as-you-go to reserve discounts on steady loads. The device-as-a-Service removes lifecycle and e-waste. Include exit and data-portability clauses on all contracts.
2. Choose the cloud over physical storage devices
Cloud storage is typically the best option for small companies. You do not have to deal with initial hardware purchases, maintenance agreements, and unexpected replacement schedules. You receive reliability, geo-redundancy, encryption, and share remotely with ease. So, begin with object storage and lifecycle rules, which tier cold data to archival classes. Monitor the leaving and demand payments and maintain analytics within a locality to reduce charges. Test restores monthly and automates backups.
The large companies that have high-volume and non-varying loads of work usually win in total cost through ownership of servers. On-prem arrays may be warranted at the petabyte scale due to latency requirements or data sovereignty. Adopt a hybrid model: retain hot, controlled, or heavy-consuming data on-site.
3. Search for teams from nearby locations
Do you position your company (or startup) as ambitious and promising? In that case, sooner or later, you will definitely need a team that will provide a full life cycle of IT processes. Hiring dozens of in-house specialists might turn out to be too expensive, so there are other alternatives:
- Find reliable software development centers in neighboring locations that will ensure the normal functioning of your digital products.
- Consider working with freelance specialists on an outsourcing basis to avoid unnecessary expenses.
- Contact your nearest agency to meet your needs (website creation, testing, implementation of other solutions).
We would like to advise you to focus only on large and well-known companies in the field of information technology, such as N-iX. Why is it so? They have a presence in many countries and have a wealth of experience.
4. Analysis the tools you use
Owners of digital companies know quite well how much money can be spent each month on various subscriptions, licenses, and tool purchases. It can be tens of thousands of dollars per year that could be used for other important tasks. So, what do we mean? First of all, you should take a look at what tools you are actually using right now. Compare this list with all the tools, subscriptions, and licenses you pay for.
Now you can see which expenses are not beneficial. Moreover, you should check the effectiveness of these tools. Conduct a survey among your in-house team to find out how often they use these programs for work. Cancel subscriptions to the software that is least useful. What is the solution for replacing them completely? In fact, there are many free tools for IT experts that many people mistakenly ignore. Cheap or free does not mean bad, so you can replace them to optimize your budget.
5. Consider automating some IT tasks
Begin with monotonous, human error work. It may be patching, user provisioning, backups, certificate renewals, log rotation, and baseline monitoring. Version environments and rebuild reliably using Infrastructure-as-Code. Run tests, build, and deploy with canaries and quick rollbacks using wire CI/CD. Close empty cloud resources during the night and label everything to chargeback. Write runbooks from documents and transform them into scripts so on-call engineers can click once instead of going through time-consuming checklists.
Impact matters. We mean avoided track tickets, time saved, and incidents minimized to demonstrate ROI and select the following targets. It is not worth automating chaos; first, make processes right, and then script them. On the one team, add guardrails, pilot, and increase. Have a manual escape hatch as an emergency.
Final thoughts
Incorrect budget planning or expense forecasting is a common reason start-ups around the world close down. In the early stages, it is especially important to avoid additional (and unnecessary) costs, so you should know and follow relevant recommendations. For example, instead of creating an in-house team in your hometown, look into leading nearshore development center providers that can give you all the services you need. This will help you get started quickly, without having to spend a ton of money putting together your own team.
Lots of businesses and startups around the world often go with specialists from N-iX, since it’s one of the most powerful agencies in the IT industry. Among other tips, we would also like to highlight the rejection of unnecessary tools, subscriptions, and licenses. Keep only the most effective programs that are really worth the money in your arsenal. Rent software instead of one-time purchases, automate routine tasks, and give preference to cloud solutions. These tips will help your company reduce some of its IT costs!
