Economic downturns. IT layoffs. Concerns about the future are running rampant. Yet, IT spending is up — especially in cloud investments.
With most companies moving to the cloud, IT budgets in cloud mitigation, along with AI technology and data analytics, are expected to continue to rise. While substantial growth from these investments is expected to support a company’s growth, putting money into cloud spending simply makes financial sense — if you’re mindful along the way.
Investments in Cloud Spending Keep Growing
Gartner data shows 78% of CFOs plan to increase or maintain their enterprise digital investments through 2023, and with good reason. Those who continue to put their foot on the right IT investment gas pedal will likely see 2.7x higher customer retention and 1.9x higher average order value. More impressive, the leading companies in this sector are more likely to increase revenue and margin growth by as much as 3x as much.
No wonder IT spending continues to grow, with an expected 5.1% global increase in 2023, according to Gartner. Much of that money is going into cloud technologies.
Why the Cloud?
The cloud is an increasingly attractive opportunity to make and save money. In periods of economic downturn and uncertainty, organizations of all sizes will use this time to reinvent, make big investments in significant changes, and capitalize on lower costs.
Cloud investments create profits, and that’s one of the core reasons money continues to pour into this area. Companies in the cloud can scale faster, recover from data disasters easier, and network more efficiently.
In addition, the cloud increases flexibility to expand or pull back, an important factor in economic recessions. Most importantly, the cloud creates better profits due to reducing costs, improving customer relationships, and boosting employee productivity.
Cloud migration got a boost from the millions of people who were forced to begin working from home in 2020. Thanks to the cloud, companies maintained a sense of business as usual remotely, empowering them to continue developing, selling, and growing even through a pandemic.
Recognizing the benefits of cloud mitigation on a remote workforce, many companies continue to focus on the ease of cloud connectivity, even as some bring employees back to the office. It’s a wise investment, no matter where it’s utilized. But for all of its benefits, there are some risks involved with the cloud.
Hidden Costs Lurking in The Cloud
Cloud migration certainly offers benefits, and for most companies, it is the ideal move. Yet, hidden costs can turn any increased sales and those expected savings into losses if not done well.
Every investment comes with costs, but it’s not the outright investment in this area of IT that’s the problem. Rather, the lack of oversight and proper management of assets is holding many companies back.
A core concern is the continued and escalated use of mobile devices. Companies are adding more devices and increasing their usage of them at an astounding pace. By providing new workers with mobility, businesses can simply grow their network through the valuable ability to work from anywhere. For now and the future, mobile devices are a solid investment.
Reports indicate cell phone growth will rise by 2 to 3% by 2025, equating to about a billion new users. By 2025, there will be 7.34 billion people communicating through mobile phones. And as companes move into the cloud, it’s common to add mobility tech to support employees.
The problem isn’t adding more tech but reviewing and bringing back in old tech of employees who have moved on — the phones of those that never get deactivated, or the dozens of laptops issued each year. If there’s no oversight on “if and how” this is done, it creates a gaping hole in a company’s potential cloud savings.
Case in Point: An Expensive “Wireless Mess”
One such company was able to scale its operations on the West Coast thanks to the use of the cloud and moving employee connectivity to wireless devices. With 672 employees and 11 locations, the company had to make remote work a possibility when the pandemic hit.
As they did, the company continued to order phones and other mobile devices for their employees but didn’t redistribute purchases when employees left. The result was 400 unused wireless devices. Those devices contributed to unused valuable assets, but also wireless inventory, hot spots, overage fees, and high costs.
Without realizing it, the company was overspending time and time again. It wasn’t remote work that was too expensive, but a lack of management of those assets.
Find out how this wireless mess was cleaned up.
Increased Use of Mobile Devices = Need for Technology Expense Management (TEM)
This example of lost funds due to lack of tech oversight is not an isolated case and one that SpyGlass sees frequently. Many companies today have launched mobile device programs to support the needs of employees, only to have no protocol followed in retrieving, repurposing, canceling, or otherwise managing those devices when employees leave or move within the organization.
The result? Incredible costs, overages, and wasted money.
However, getting mobility costs under control with a technology expense management (TEM) audit helps support not just better profit margins but also cloud spend. Finding these pitfalls and losses, and capitalizing on them, puts that ongoing monthly loss back into the cloud budget.
As companies continue to focus on remote work, they cannot pull back from providing mobile accessibility. What they can — and must — do is find a way to better control the technology services budget, keeping a close eye on actual spending.
While technology expense bill auditing is most likely a low priority, a TEM audit can mean serious ROI. How much? It’s not unusual for a SnapShot Audit to help a business reduce its total telecom spend by 20% annually. With a comprehensive, in-depth TEM audit of current spending patterns and assets, an audit simply makes sense today before the cloud budget gets any higher.
Ready to speak with a SpyGlass TEM expert?
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