Five ways your IT department is probably wasting money

Jason Hiner: Today's IT budgets stretched very, very thin, not only because of budget cuts, in some cases, but also because IT is doing more things than ever as technology has become more and more critical to almost every aspect of business operations.

I'm Jason Hiner, and today on CIO Sanity Savers, we'll look at five of the most common ways that IT lets some of those precious dollars slip right through their fingers.

No. 1: Wasting energy

The electric bill is a huge expense for most companies   and the IT department is a BIG user of energy. You can save more money than you might suspect by adopting even a few quick energy-saving tips. For example, IT personnel can power off unused servers and systems, force power-saving settings on desktops with solutions like Verdiem Surveyor,  and simply turn off the lights when not needed in IT offices and server rooms. And that's just the tip of iceberg.

No. 2: Spending too much on mobile technology

Smartphones and mobile devices are the hip gadgets for IT pros, but company-provided equipment and plans may be costing more than necessary. A recent survey showed that only one out of four employees uses 75% or more of the voice minutes their companies are paying for, for example, and almost half have services on their plans that they never use at all.

No. 3: Using consultants when the job could be done by staff

It's a common scenario: Employees have been telling management for months or years that changes need to be made, but they've been ignored. Then the company hires a consultant, who charges hundreds of thousands of dollars to do a study and arrives at the same conclusion. If your staff has expertise in a particular area, it's generally more cost effective to allow them to do the job than to bring in an outsider who will spend a slew of billable hours getting up to speed on how your company operates and what its needs are.

No. 4: Hiring full-time employees when contractors would be more cost effective

The flip side of the previous item involves being afraid to use consultants or contractors when it's appropriate. Hiring full-time employees to handle a workload that's likely to be temporary in the hope that you can eventually move them on to something else once the project is over. This is when independent contractors make sense, especially when you have great staff members who can guide and manage those contractors.

No. 5: Overspending on hardware

Buying new hardware can actually save you money, if you do it right, especially when you're doing server consolidation or buying hardware that's less expensive to maintain due to lower maintenance costs or better power savings. Where a lot of companies waste money is by purchasing equipment for a project that requires intensive resources for only for a limited time. An alternative option is to use a cloud-based service like Amazon AWS that allows you to purchase server capacity that you can scale up or down to fit your needs.

To go deeper on this topic, read Deb Shinder's article that this video was based on.

I'm Jason Hiner and this has been an episode of CIO Sanity Savers. For more, you can find my blog at hiner.techrepublic.com, and you find me on Twitter at twitter.com/jasonhiner. Thanks for watching. See you next time.