Beware the consequences of IT budget cuts
Technology spending cuts - due to the rising cost of living and inflation - could make major organizations more susceptible to operational risks.
As systems get more complex, dependency on IT grows. So, with major corporations making sweeping job layoffs and big cost cuts there is an increased risk of introducing IT problems. Cyber threats are proliferating and cuts to budgets may leave you with security approaches that are no longer fit for purpose. No bank wants to see fines like the one TSB received in 2022.
Banks are not the only ones that can suffer: Sportswear chain JD Sports was hacked recently and its 10 million customers’ data could be at risk. Outages can damage reputations as well as the bottom line. Witness the fuss over Microsoft’s recent five-hour network outage, which crashed the Azure cloud platform, Teams and Outlook in the US, Europe and EMEA. This shows that even the most technologically advanced and straightforward systems are susceptible to operational risk.
And it is essential to resolve an issue as soon as possible, or risk further disgruntling millions of users. Huge multinational corporations must have highly proactive monitoring to see what their systems are doing in real-time. And real-time means in real-time – not 60 seconds, 30 seconds or even 15 seconds after something occurs.
How to cut costs with less risk
Rather than take a blanket cost-cutting approach to IT, possibly jeopardizing your cybersecurity and operations, there are better ways to find efficiencies and proactively identify risk in your IT estates:
• 360-degree full-stack monitoring
Customer acquisition and reduced churn are essential to maintain and grow the “top line.” Knowing what your customers are experiencing with your services, finding the issues and resolving them quickly is key to not losing customers. Or attracting bad comments on social media. High quality digital experience monitoring (DEM) and internal monitoring are crucial.
• Reduce the IT estate
Many companies have a much larger IT estate than they need to run the business. It is not uncommon for a large IT estate to have 5% of servers which are “zombies” – ordered and installed when an application was being installed, but not used and not part of the application estate. Given a server costs more than $5,000 per year to run, this is wasted expense which can easily be detected and eliminated. On top of this, there is always low utilization on large parts of the estate which can be removed by moving workloads around.
• Cloud cost optimization
Rushing to public cloud providers may give you some advantages, but it may make it more expensive than you think when moving your IT estate across. With cloud cost optimization you can find cold spots in your data centers, see where your cloud estate is wasting money, and remove them.
• Observability
Regulators are expecting financial services firms to improve reporting on business-critical services, with increasing global operational resilience regulations mandating it. This can only be achieved by capturing the detailed data about what is happening in your IT estate by using an observability platform.
Conclusion: Firms must better equip themselves to protect their business and their customers. Within an ever more competitive landscape, the reputational damage and customer losses following failures cannot – and should not – be underestimated.
While it might seem costly at a time when most businesses are operating on tight margins, the bottom line is this: If you say you can’t afford to prioritize the operational resilience of your systems, then you can’t afford to be in business.
