In the modern era where businesses stand on the backbone of technology, the significance of a well-advised IT budget can’t be overstated. With the world witnessing rising costs of living and inflation, organisations might feel the pressure to cut corners, particularly in their technology spending. However, the short-term relief brought by these cuts could pave the way for long-term disasters.
Operational Risks and Complex Systems
As systems become intricate, the corporate world’s dependency on IT escalates. Major corporations, in a bid to balance their books, often resort to drastic measures like job layoffs and sweeping cost cuts. But this attempt to salvage today can sow the seeds for potential IT challenges tomorrow. With every cutback, the risk of introducing IT problems multiplies.
The Real-World Repercussions
We needn’t look far to witness the aftermath of underfunded IT infrastructures. No bank wishes to follow in the footsteps of TSB, which faced hefty fines in 2022 due to inadequate IT spending. Banks, however, aren’t the sole victims. Sportswear magnate JD Sports confronted the nightmare of being hacked, potentially jeopardising the data of 10 million customers. When even industry giants like Microsoft aren’t immune, as evidenced by their recent 24-hour data centre outage affecting Azure, Microsoft 365, and Power Platform services, it underscores that even advanced systems can falter without proper support and attention.
For colossal enterprises, real-time monitoring is imperative. When we say real-time, we mean instantaneously—not 60, 30, or even 15 seconds post an incident. Delayed responses could further infuriate millions of users, tarnishing brand reputation.
Cutting Costs without Compromising Security
While indiscriminate slashing of the IT budget poses risks, it doesn’t imply that cost-saving measures are off the table. Firms can take a structured approach to IT savings:
- 360-degree full-stack monitoring: With customer retention and acquisition being one of the most important parts of business, understanding their experience is key. By employing high-quality digital experience monitoring, organisations can swiftly detect and rectify issues, safeguarding their reputation.
- Reduce the IT estate: An oversized IT estate is a financial drain. Addressing and eliminating “zombie” servers—those installed but not utilised—can lead to substantial savings. Besides, optimising workload distribution can further cut down unnecessary costs.
- Cloud cost optimisation: While cloud solutions promise flexibility, migrating without strategy might inflate costs. Through cloud cost optimisation, organisations can identify and eliminate inefficiencies, ensuring they extract maximum value.
- Observability: Especially pertinent for financial institutions, with regulators mandating enhanced reporting, maintaining a detailed log of IT operations is crucial. An observability platform can facilitate this.
What the experts have to say…
As businesses face the challenge of budget cuts, experts have weighed in with invaluable insights to navigate these financial constraints effectively.
Robert Monroe, a distinguished teaching professor at Carnegie Mellon University’s Tepper School of Business, encourages a holistic approach to expenses, emphasising the need to align spending with overarching business goals. On a similar note, Aashish Chandarana, the CIO at Productiv, highlights the untapped potential in SaaS optimization. He warns against the pitfalls of overspending due to misjudged license requirements. Additionally, seasoned consultants Scott Schlesinger of PA Consulting and Tim Potter from Deloitte Consulting recommend a meticulous review of ongoing IT projects. Their focus is on assessing the real ROI and being wary of the sunk-cost fallacy. Central to their advice is the principle of making data-driven decisions, ensuring that leaders steer clear of emotional biases and political roadblocks.
In a landscape where reputation is fragile and customer trust is a necessity, skimping on IT budgets is a gamble few can afford. Operational resilience is not just something that is nice to have—it’s a cornerstone of modern business. By making shrewd, informed modifications, IT leaders can navigate the choppy waters of budgetary constraints while ensuring they don’t compromise their organisation’s future.
If you’re looking to strike the right balance between cost-saving and maintaining robust IT operations, look no further. Platform 24 offers unmatched IT expertise to guide and fortify your strategies. Get in touch with Platform 24 today and let us help you safeguard your tomorrow.