A recent article in the Wall Street Journal noted that organizations expect to spend $3.9 trillion dollars globally on IT in 2021, according to research and advisory firm Gartner. The question is, are they spending wisely? According to the article, companies can waste a lot of money in IT spend.
I addressed this recently in an article I wrote for the Forbes Technology Council. Below are some of the pitfalls I mentioned and how they can be avoided:
Reinventing the wheel. Consider the cost/reward benefit in the build vs. buy decision. If you have an opportunity to build a custom solution that will provide true competitive advantage, then it makes sense to invest in the solution. However, when it comes to commodity software, there’s no sense in reinventing the wheel and an off-the-shelf solution can drastically save costs.
Recurring cloud fees. The cloud has huge benefits, yet come with recurring fees that can add up. It also can be easy to forget to cancel services and continue spending for cloud usage long past the time that you need it. On average, you should revisit your cloud costs monthly to identify any discrepancies.
Knowing when your system is beyond repair. Often, continuing to repair legacy systems can end up costing more than it would cost to buy a new one in the long run. Consider the ROI of a new system and be willing to give up legacy – even if it means lots of resources and disruption up front.
IT projects don’t have to soar out of control and there are ways to rein in the costs. Some of the ways to accomplish this include starting out small and testing your solution through innovation sprints, collaborate and communicate across departments and key stakeholders, and regularly take a software audit to determine where there may be overlap or non-use.
Digital transformation is becoming a necessity for companies of all types and sizes, but it doesn’t come without a high cost. It’s important to use your budget wisely to not only gain the greatest value out of your IT dollars, but also to spend strategically to ensure your organization leverages the most advanced technologies to meet your business goals.
For more insights on digital transformation read Best Practices for Addressing Digital Transformation Challenges or Should Your Digital Transformation Partner Be a Tech Guru?