How to Reduce & Fix Tech Spend Without Impacting Productivity
Nowadays, I’m building IT programs from scratch, constructing new offices, and conducting compliance and security assessments as an independent contractor for early stage companies. You can visit my website, theitplan.com or hit me up at firstname.lastname@example.org to chat more.
After 15 years in IT, much of it in managerial and director level roles, I can safely say I know a thing or two about your tech spend. I’ve seen it spiral, I’ve seen it tightly controlled, and how those and everything in between can impact productivity.
I’m going to lean on that experience to give you the short version — please engage your qualified technical staff where explanation may be useful.
Here’s 13 ways to reduce your tech spend, 5 ways to manage it, and 3 upstream problems that led you to this article. Let’s start with the #1 place to recoup capital from excess.
Top 13 Ways to Reduce Your Tech Spend
- Breakdown and explain the line items on your latest AWS bill (IaaS) and Salesforce and Atlassian (JIRA). IaaS is consistently, without fail, the 80/20 of your spend but Salesforce and Atlassian are cost juggernauts.
- Eliminate redundant SaaS services by arranging your SaaS Tracker by category. Zoom and Meet are doing the same thing. You will find a lot of these and if you don’t have a SaaS tracker — please make one.
- Justify each person’s role in Figma, Notion, Guru, Asana and all the other SaaS whose cost structures allow free “view” roles, but paid “editor” roles.
- Every Google Workspace account should be a current employee. That means no former employees, no shared accounts, no accounts for non-humans (except one for integration purposes). Non-person accounts (ie: email@example.com) is why Google Groups exists.
- Many of the computers you’re buying should be Chromebooks.
- Adobe and Office licenses are ultra-ripe for “needed it once to convert a PDF”, yet that $90/mo license is going on 6 years (Google Docs and MS Word are redundant services, see #2)
- Single function SaaS (ie: Calendly, Loom, etc) are like having candles on a birthday cake. You don’t really need them but they were a nice touch. I call these Silo Services — they do one thing or solve one problem, yet need to pay for their own HR team, their own Finance team, their own AWS bill — etc.
- You really don’t need Meraki. Annual licenses to use hardware is the equivalent of airline change fees. It takes one to stop and they all quickly follow because it’s kind of a scam. Same with your camera system. Nest = monthly subscription, Unifi = one-time.
- The vendor charging you $15k to install $400 of door locks in the new office is putting his kid through college on you not knowing what an electric strike is.
- It is unlikely that you’ve used more than 10% of your “dedicated gigabit fiber” internet circuit. You’re paying for plumbing to handle Niagara falls, but using it to wash your hands twice a day.
- Any sector that charges you “overage” costs is banking on you going over to pad their bottom line. Remember buying cell phone minutes in 1990? We’re still doing this in the business sector. Audit your VoIP platform for former employee phone numbers (Ringcentral, Google Voice, etc). Audit your Verizon MiFi for megabytes over. Audit eFax for how many pages you faxed last month.
- Docusign is the most well known e-signature service. It’s also insanely more expensive than every other one doing the same thing and has no unlimited tier (see #11).
- All Windows machines have built-in antivirus. Use this instead of buying Norton licenses.
Top 5 Ways to Manage Your Tech Spend
- Managing spend is easier to do when you standardize hardware and software by role. When you hire, you know exactly how much one-time and annual spend will be added to the budget.
- Amazon Business has a spend threshold control. You can set a dollar amount to require approval from whomever you specify before a staff member’s purchase is executed.
- Do not expense employees directly for technology related expenses. All tech procurement — hardware (incl. peripherals) and software — needs to be channeled through your qualified technical representative.
- I’m almost certain that someone has approved $300 Bose bluetooth earbuds. What is your company policy re: discretionary tech spending and what controls are in place to enforce it?
- Add a requirement to justify new SaaS services. It takes about 10 minutes and demonstrates how much of your SaaS spend is unjustifiable.
Top 3 Upstream Issues that Lead to High Tech Spend
- You do not have an IT person (your CTO is not an IT person). This is kind of like buying a new house without a realtor or a lawyer — you’re making decisions without qualified guidance.
- Tech spend is not centralized. If you don’t funnel this and have clear policies or standards for what is acceptable, staff are going to end up with $300 Bose earbuds.
- You’re not periodically auditing your SaaS, your hardware, or your accounts in SaaS. Annual or twice annual reviews will keep the room nice and tidy.
That’s it! Well, almost it. If you’re a trusting person, check out tropic.ai and other SaaS negotiation vendors who promise to reduce your spend. I’ve been in the startup world too long to trust things like this but I’ve been known to be wrong.
All it comes down to is setting standards, empowering a qualified individual to be accountable, using controls to enforce standards, and periodically revisit the bills. You got this.