by Peter Wayner

12 IT budget tricks to reduce costs post-COVID

Feb 15, 2021
BudgetingIT Leadership

The pandemic has seen more weight thrust on IT’s shoulders, but often not the bump in budget to support it. Here are a dozen tips on trimming costs in response to strategic shifts in the wake of COVID-19.

ben franklin hundred dollars in a vice budget tight budget spending by modernlife getty
Credit: ModernLife / Getty Images

If we cross our fingers, it’s possible to imagine a world with the COVID-19 pandemic receding behind us. While some parts of life may return to the way they were before the pandemic hit, the world of IT in the enterprise won’t. Many organizations are actively talking about not going back to the office and that could mean seismic long-term shifts in IT portfolios and budgets.

Regardless, we can expect communication and collaboration to increasingly take place via online tools — and the expectations will be higher. Moreover, employees in a physical office can still hold meetings and perform plenty of work even when the network goes down, but a network failure or server crash can shut down everything if everyone is working from home.

Many teams faced these issues at the beginning of the pandemic when the massive shift to virtual workflow turned into a tidal wave. The basic challenges are the same but now the parameters are different. What was once a temporary maneuver is now morphing into a permanent strategic vision. What were once one-time emergency measures are now becoming recurring budget items that require long-term planning.

Alas, just because more weight is on IT’s shoulders doesn’t mean the CIO will get a bigger budget or even one the same size as last year. Many businesses are facing existential crises and no one will be able to escape difficult cuts.

The good news is that good CIOs often have a few tricks up their sleeves. Even if they’re trimming muscle and not fat, they can often use new technology to roll out solutions that are often better, faster and more agile. Yes, budget ultimatums are painful, but they’re also opportunities.

Here are 12 ways to remake your IT shop — and your budget — while adjusting to the new normal.

Reduce in-office IT infrastructure

Each business will make a decision about the future differently, but many organizations are talking about the extreme: moving to 100% remote teams. Others talk about dramatically shrinking the size of the offices, asking employees to come in for meetings one day a week. Reducing the number of desks can lead to IT savings, as fewer people around the office means less demand on much of the IT infrastructure. It’s not just routers or desktops; even bandwidth coming into the office can be sliced. Here, the savings isn’t that hard to predict because it will generally follow the office population reduction by more or less the same percentage. 

Leverage temporary space

Choosing office space isn’t typically the job of the IT department, but relying more on flexible offices will affect IT budgets, too. Many companies are renting conference rooms and shared office space for a few days per month. These deals generally include many parts of the IT infrastructure, a bonus that moves some IT costs to the real estate budget. That’s a bit of a trick of the light, but if you break out the costs, the savings are real. Instead of paying for 30 days of internet bandwidth and other features to support a full-time office, you’ll only be paying for them for a few days a month.

Consider bring-your-own policies

There are dangers to letting employees take ownership of their computing equipment, but when the worries are small and manageable enough, the result can be liberating for employees and IT budgets alike. Security issues are the biggest challenge, but empowering people to make their own choices can cut consumption dramatically. If you buy one new monitor for a team in the office, everyone on the floor is going to want a new one because it’s only fair. But if you give everyone a stipend (or a boost in their salary), they’ll consume more wisely for their personal needs. The people who need a big monitor will get one while those who can get by with a laptop may spend their stipend on a portable projector.

Evaluate bring-your-own software

If someone at home buys a family version of office software for their kids to use for school, should a company pay more to buy a second edition? Or can the home version be adequate for many employees? People who mainly read office memoranda and skim spreadsheets may be able to use their own personal software to accomplish much around the office. Employees with a need for access to more secret documents, though, may be better off with a corporate copy used on a locked-down company machine.

Check for cheaper tools

The best-known tools such as Zoom, Microsoft Teams and G Suite are usually more expensive than alternatives. They’re excellent products and the price reflects this. But a number of lower-priced alternatives offer similar features at prices that can be dramatically lower. Tools from companies such as NextCloud, Zoho, and LogicalDoc are just a few examples of options that may offer enough functionality for your users at a cheaper price. Zoho, for instance, has a complete accounting suite. Open source packages such as Libre Office are also good options. They may even be free. But remember, you’ll often pay in time instead of money. If your team likes the opportunity and has the time to pull it off, the flexibility can be an opportunity for greater customization.

Check for cheaper clouds

Many cloud services how become commoditized, with low-end competitors arising frequently. Backblaze, for instance, suggests that the major clouds may be 200% to more than 1000% more expensive. Sync’s list prices may be half the cost of major brands. There can be downsides if you use many of the other tools of the major competitors but if you just need the commodity service there’s no reason to pay more than a commodity price.

Stop trusting

Some computer security architects are embracing a “zero trust” philosophy in which all office tools should assume the worst about any network and encrypt all data. The idea of turning the office network into a fortress with a fixed perimeter is becoming untenable when the physical office is fading. The good news is that a successful implementation of this philosophy can lead to savings on network security and remote tools such as VPNs.

Use local servers for sustained loads

While offices may become dramatically smaller post-pandemic, many will still support their own server rooms. Companies that can buy and maintain their own servers can save dramatically over cloud machines, especially when the loads are sustained. The option may not be right for work that varies dramatically over time or works with people around the globe. The cloud machines offer flexibility and reach that are hard to match with local servers. The best use of local hardware may be long-term storage, backups, and services that may not need to respond as quickly.

ARM servers in cloud

This has nothing to do with the pandemic, but the architectural sea change happens to align with it. Some of the major cloud providers are rolling out servers with ARM chips and marketing them with claims that they may offer as much as 40% better price for the performance. Some tasks such as running simple websites or common databases are easy to move to these instances, but some custom software may require recompiling and in rare cases even rewriting. The best approach is to set up a new instance and compare benchmarks on your specific tasks.

Take advantage of millisecond billing 

Platforms such as AWS Lambda, Azure Functions or Cloudflare Workers enable developers to write a very small amount of code that is billed only when it’s running. AWS recently reduced the granularity of the billing meter measuring all invocations to the millisecond and that means there may be a new incentive to revisit your stack and reduce the response time to save more. This is a good option for workloads that respond to occasional or sporadic demand because there’s no charge for maintaining a server that’s idle. Developers who can simplify their functions to run even faster can save even more.  

Transform spare office space into server rooms

In the past, many debates in the IT realm had little to do with real estate. Now, they can be the source of substantial cost savings, but only in the right situations. Companies that enjoy short-term leases can shed office space easily but those that own their buildings or are locked into long-term leases have much less to gain or lose. The costs are already fixed.

These sunk costs can be an opportunity. The price for real estate can sway decisions about hosting your own data center. Running your own server farm may be more expensive if you need to pay for the space. If your company already owns the building it could be much cheaper. Indeed, in the winter the heat from the servers can also heat the buildings leading to more savings.

Invest in culture building

The social bonds that tie an office together are an important foundation for training, security and cutting through the red tape. Virtual offices can lose the low-level, ambient familiarity that can glue an office together. Social functions can supply that glue. While special events will cost a bit more than nothing, they can be much cheaper than running a full kitchen, gym or game lounge, as some shops used to do. And, yes, they’ll sound like more fun than work, but they’re cheaper than a security breach caused by someone exploiting everyone’s lack of familiarity for social engineering hacks.