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8 min read

How to Right-Size IT to Prepare for a Looming Recession

Are we on the verge of an economic recession? One look at news headlines shows that it’s a hot topic this summer, along with steep inflation and supply chain troubles.

Predictions of a possible recession should be taken seriously by business leaders. Not doing so would be like disregarding a wildfire or flash flood warning – there’s potentially something bad on its way. You don’t know how bad it will be, so you’d better be prepared.

So how do you prepare for a looming recession?

The kneejerk reaction is to start cutting costs to eliminate anything you think you can live without. When this happens, IT inevitably gets put on the chopping block.

While there are ways you may be able to slim down IT, you don’t want your efforts to backfire because cutting IT costs the wrong way can lead to higher costs in the long run. And when IT suffers, your customers and your employees will feel it in inefficiencies and frustration – which have costs too.

Your goal should be to right-size IT, which is not only applicable during trying times but for any time you want to make the best use of your IT resources.

The way you do this is to evaluate:

Review What You’re Supporting: Limit the Scope of Support

The first thing you should do to cut costs in IT is to review exactly what equipment you’re taking care of. You may have unused or redundant hardware that’s increasing your support costs. Every computer has a set of licenses associated with it for software, security, and the like.

You may be doubling up on these without realizing how the costs add up.

For example, if everyone has a desktop workstation at the office and a laptop for home, then maybe it’s time to make the switch to just a laptop. This may mean that you need to get docking stations so employees can easily go from home to office when needed.

You might also want to reconfigure your work areas. If everyone isn’t at the office at the same time, then you probably don’t need so many monitors, docks, and peripheral equipment.

Another area to audit and slim down is data storage. The more data you have, the more space you need to store it and the more money you’re potentially paying for backups.

Review your data archiving policies or create them if you don’t have them. Make backup procedures as efficient as possible by identifying what data is critical to get operations up and running and which data is not as important.

What You’re Paying For and Why You’re Paying It: Audit Your Technology Bills

What if you were paying a bill for $200 every month, but no one knew what it was for?

Believe it or not, this kind of thing happens a lot. The bill comes each month and paying it becomes routine since no one knows exactly what it’s for – or what will happen if they stop paying it. It’s worth your while to review all the bills related to your technology. This includes telecom, voice, data, and subscriptions.

  • Do you still need that phone line?
  • Do you still use all those cell phones?
  • Do you still need that domain?
  • Is that still where your website is hosted?
  • Does your marketing team still use their Adobe Creative Cloud subscription?
  • Does anyone use that project management software anymore?

It might take some tracking down, but persistence will pay off when you discover a way to cut a few thousand dollars from your IT expenses. You may even find that you’ve been paying for something you haven’t been getting and you can get a refund.

Software licensing is a similar situation. If your employee offboarding process is missing this piece, you could be paying for more licenses than you’re using. Conduct an audit to ensure every license is associated with a user.

While you’re at it, ask employees if they’re using all of the web apps you’re paying for. People and preferences change, and their tech tools might too.

If you’re an VC3 managed client, we’d be happy to help facilitate this process. We know what you pay related to our services, but we may not have visibility into every technology-related bill you pay. If you’d like our help looking into anything, just let your Client Success Manager know.

How You’re Supporting IT: Adopt the Right Approach to IT Management

Once you’ve eliminated the hardware, services, and applications you don’t really need and have a handle on data storage, it’s time to review how you’re supporting IT. What we’re talking about here is the IT management approach or philosophy that’s guiding how your IT support team operates.

It may be tempting to move to a “we’ll call you when we need you” situation with IT support, but that implies a totally reactive approach to IT management – which isn’t really management of IT. The IT function is similar to accounting – it’s an ongoing process with daily activity. You wouldn’t wait until you had a mountain of bills to pay and invoicing to do before engaging your accounting person. You want that process rolling smoothly to avoid interruption, just like with your technology.

If you’re trying to manage IT without the right proactive practices and processes, you will have many more bumps along the road than you’ll want to live with. These bumps slow down your employees (or even stop them) and make it harder for them to serve your customers.

When issues do happen (and they do even when you're proactive), you want employees to be able to get help fast. Your approach to IT should include support desk services and escalation resources when some deeper digging is required to find the root cause of a problem.

You’ll do your best at managing technology costs when you’re strategic with IT. When you’re strategic, you don’t do anything “just because.” You operate with purpose – to create a solid technology foundation; to equip employees with what they need to be productive; to leverage technology for innovation and competitive advantage; and to use technology to meet specific business goals.

The most cost-effective approach to IT is one that is proactive and strategic and gets people the help they need when they need it.

How You’re Managing Cyber Risks: Security for Sustainability

We can’t talk about IT management without including cyber security. Random cuts in your security layers without fully understanding the implications can have painful results. Take the IT manager who stopped doing software patches as a cost-cutting measure. As a result, vulnerabilities never got closed, and the company had a cyber attack.

Cyber security isn’t optional. The level of protection businesses need these days is enterprise worthy. The baseline for security has moved up and even small businesses need advanced tactics in their cyber security strategy.

The bottom line for security is business sustainability. You need to be secure to survive because the impact of a cyber attack can take you further down than a recession ever will, and we’re talking fast.

Who is Supporting IT: Do You Have the Right Team?

The who part of IT support branches out from the how parts. Once you understand that your approach to IT and cyber security management will affect your results and the value you’ll receive from your IT spending, you want to make sure that your IT team or managed services provider (MSP) can deliver.

At this point, you need to ask a lot of questions about why you have who you have supporting IT.

  • Do you have an internal team?
  • An IT manager and outsourced IT?
  • An internal team and co-managed IT?
  • Fully outsourced managed IT services?

Whatever the mix, is it the right arrangement with the right people?

If you’ve always insisted on having onsite support, is that still necessary? Does your IT team (internal, outsourced, or both) have all the skills you need for comprehensive IT and security management? How will staff turnover affect your business?

If the threat of a recession causes you to search for a different managed IT services provider, beware that some MSPs may be slashing their prices to take advantage of a recessionary situation. Things may start out great, but their company may not be operationally mature enough to handle the new business.

If you get dazzled by a “good deal,” go back to the how part of this article and ask the questions that will uncover whether or not the IT company can really deliver the approach to IT and cyber security management that will bring you the most value.

Right-size IT for Any Time

Whether there’s a recession on the horizon or not, right-sizing IT is a good idea. Some of the items that we discuss in this article can be inserted into your processes.

For example, take care of software licenses during your employee offboarding process. Other areas would benefit from an annual review, like auditing your technology bills. However – and whenever – you decide to right-size, the outcome will be that you know that you’re making the best use of the money you spend on IT.

Helping California Companies Through Good Times and Bad

We’ve been around a long time and wouldn’t still be here today if we didn’t know how to guide our clients (and our own business) through the ups and downs of changing circumstances. So whether you partner with us in a co-managed or fully managed arrangement, we’re on a mission to help businesses reduce the cost and risk of IT, and we would love to help you with it too.

Let's talk about how VC3 can help you AIM higher.