Four ways vCIOs lower your IT costs, with real examples

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The virtual chief information officer (vCIO) is a uniquely versatile IT role – having one can positively impact business performance across so many domains, it’s hard to list them all. As we explained in a recent blog post, vCIOs drive time and cost savings, improved resilience, stronger security, and long-term revenue growth. 

But it’s worth going into more detail about one benefit that matters a lot for modern businesses, and that’s reduced IT cost. 

Why IT Costs Are Increasing 

On the surface, it seems like IT should be more affordable than ever – after all, businesses are shifting to software-as-a-service (SaaS) and cloud-based infrastructure, computer power is increasing, and IT expertise is on the rise. 

But the numbers tell a different story: in 2022, IT budgets have reached their highest point in history, and Gartner expects software spending to grow almost 10% over the coming year. IT expertise can’t grow fast enough to keep up with demand, leading to talent shortages and salary inflation. 

So what gives? The answer lies in a commonly proposed explanation for the Solow Paradox: for every challenge technology solves, it generates new ones, including cybersecurity threats, the need for maintenance, and an influx of data. 

Ultimately, it costs money to address these challenges – but thanks to their combination of business and IT expertise, vCIOs can make it cost less while raising your bottom line in the process. In the remainder of this article, we’ll share four ways, with real examples from our team members. 

  1. Eliminating Unnecessary Expenses

Today, much of the money businesses spend on IT is completely unnecessary. According to one study, the average company wastes more than $135,000 per year on unused or redundant SaaS tools. Finding and eliminating this unnecessary software is just one-way vCIOs can reduce expenses. 

Sometimes, eliminating unnecessary expenses comes down to negotiating a better deal with your vendors. One of our vCIOs helped a client to bring down the cost for their Internet and phone services, saving $500 per month in the process. 

Other times, it comes down to finding a better solution than what’s currently on the table: another of our vCIOs helped a client to avoid a $40,000 HVAC expense by reducing their client’s on-premise computing infrastructure, and moving them towards the cloud. 

Finally, businesses can reduce their costs by using existing tools in a smarter way, rather than acquiring new ones. One of our vCIOs saved a client from making a costly software investment by finding the feature they needed in an existing tool and working with the vendor to set it up. 

  1. Accounting for Long-Term Consequences

The right way to save money can be far from obvious: a costly investment may bring long-term benefits, and a seemingly necessary one may turn out to be unnecessary on further inspection.  

Drawing on their expertise, vCIOs can help decision makers to account for hidden variables, educating them on the pros and cons of each decision, and recommending choices that will save money over the long term – not just the short. 

One of our vCIOs worked with a client who was hesitant to spend money upgrading from critical software they had been using for almost 15 years. Another client was hesitant to buy new servers based on high upfront costs, despite the problems they were having with their existing infrastructure. 

In both cases, our vCIOs were able to sit down with executives, show them the relevant projections, answer questions, and give them the clarity they needed to move ahead. Without direction and expertise, businesses can delay necessary changes long after they have already lost invaluable time and productivity. 

  1. Avoiding Technical Debt

Technical debt – which describes the loss in performance, competitiveness and productivity businesses experience when their technology stack falls behind industry standards – can feel like an abstract concept, until you find a concrete example. 

Despite its high-tech economy, many businesses in Japan still rely on fax machines, paper documents, Internet Explorer and other technologies largely abandoned in the wider world. Consequently, the country struggled to implement remote working during the COVID pandemic and has the lowest business productivity of all G7 countries. 

While U.S businesses may not rely on fax machines, 79% are still behind on technological transformation. Due to legacy IT systems, one of our clients had issues staying connected to the Internet and conferencing with their remote headquarters – it delayed meetings and communication, prevented work from being shared in a timely way, and slowed down critical processes. 

A vCIO from MainSpring was able to assess the problems that had amassed over many years of technical debt, and create a modernization roadmap encompassing new networks, servers, Enterprise Resource Planning (ERP) software and telephone services – best of all, it only took 12 months to implement. 

  1. Planning Your IT Budget

Most small businesses do not have a yearly budget at all, much less a budget dedicated to IT expenses. But creating a budget is key to managing expenses smartly, and helping your business to lower its long-term costs. 

First, planning projects and expenses for the entire year ensures that your IT team will be actively pursuing tasks that add to the value of your business. Without the direction provided by a budget, any team can become a revenue drain rather than an asset. 

Second, budgeting keeps costs within an acceptable range, avoiding interference with essential business needs, and preventing project abandonment that leads to wasted time and money.  

Finally, budgeting helps clarify priorities for IT improvement based on business needs, ensuring that your spending actually makes a difference. As IT experts with business expertise, vCIOs are uniquely qualified to identify spending areas based on your long-term and immediate goals. 

Continual Improvement 

Every organization’s IT infrastructure is unique and cost optimization cannot be reduced to a single step or series of steps – one thing that differentiates a great vCIO from other IT professionals is their commitment to approach each client individually, and carefully monitor their results over time. 

A great vCIO will apply the lessons learned from success and failure, continually tracking key metrics and outcomes to learn what works. At MainSpring, our vCIOs put the success and satisfaction of their clients first, continually working to achieve strategic goals, reduce costs, and improve results over the long term. To learn more, contact us today!