Recession and Resources

Recession and resources // How you reduce costs instead of employees

As we approach the looming recession, how do we reduce costs without reducing personnel?

Read our suggestion for initiating a strategic optimization that ensures long-term business sustenance.

We hope to inspire decision-makers to reduce costs, not employees.

The recession is arriving aggressively. The current Corona pandemic and the resulting financial instability is forcing leaders and company owners to make unforeseen cuts in acute decision-making processes. This is a challenge faced by decision-makers across industries and sectors.

The acute need for prioritizing resources to keep businesses afloat often spur the decision to lay off employees. But staff cuts are not always the most optimal way of reducing IT costs. There are other approaches to strategic optimization, that are better for your business in the long run.

This is what we built our own business on – Mugato provides methods for optimization through data-driven, automated processes, that support the coherency and stability of your company’s infrastructure.

The current crisis has compelled us to share our experiences for the benefits of company-owners and decision-makers, who face the recession with prospects of acute cost-reductions.

How to prioritize here and now, if you want to optimize IT spending in ways that sustain your business in the long run?

“No one will go through this untouched”

The Coronavirus has brought a severe downturn. The results of the pandemic are aggressively influencing businesses across industries. Even sectors that usually stand strong in similar storms will not go untouched.

A recent member survey by the Danish Chamber of Commerce highlights the dramatic financial consequences across sectors.

Every fifth company has laid off employees since March 1st 2020
Every sixth company expect to lay off more employees in the coming weeks

Poul Noer, Senior Consultant in the Danish Chamber of Commerce states that “no one will go through this untouched,” as cited by Computerworld.

Read the report from the Danish Chamber of Commerce here

Ensure stability and business continuity

As decision-makers attempt to navigate these bleak waters of the immediate future, questions arise: How should you prioritize in times of crisis? What is the right prioritization, if you want to ensure stability and business continuity?

Unfortunately, the acute need for cutting costs often result in staff cuts, as employee costs often make up a large part of total costs. Although it is expensive to reduce staff, it is considered the most effective option – but this approach has consequences for your business in the long run.

For many companies today, IT is the backbone of their business, regardless of industry. Extensive digitalization has made an effective IT infrastructure vital for your success and business continuity.

This means that the skilled workers in the IT department are a key asset – they have the competencies and capacity to ensure a functional IT-infrastructure, and to drive your business forward and sustain stability.

Optimize your IT toolbox

Balancing the needs for acute cost reductions and future financial stability calls for a coherent business strategy with a long-term scope. We suggest this approach to optimize your IT costs.

Most companies we work with have a collection of tools and systems for IT management, which have been put together over time without a set strategy. The consequence is a tangled landscape of tools, services and systems for IT infrastructure management. This can be simplified.

You most likely have several services with overlapping functionalities. They might have similar functions. Or they might have different functions that complement each other in theory but are incompatible in terms of data analysis, demanding you to monitor a number of tools. This leaves you with a fragmented overview and an unnecessary workload.

We suggest that you reduce the number of tools in your IT management toolbox. Choose a service that provides you one solid overview. One concise overview can provide an authoritative reference of insights into your IT-infrastructure.

In larger companies, having one central go-to overview provides a common ground for the status of your IT landscapes. This gives the IT department a common understanding of the state of affairs in your IT infrastructure and reduces the need for ongoing, fragmented status-updates between teams.

In smaller companies, a centralized approach provides a concise overview of IT systems. Holding the complete knowledge of your infrastructure in one place provides certainty and gives you a steady basis for decision-making.

Reduce costs, not employees

This is our suggestion for initiating a strategic optimization that ensures long-term business sustenance.

This approach allows you to allocate the resources within your company optimally in times of change, cut unnecessary IT costs in an instant, and lay the groundwork for at stabile future.

Avoid the loss of experience and specialized competencies within your company – maintain competent employees, whose knowledge and skills are vital for your infrastructure and business continuity.

Optimize your IT costs through a considered evaluation of your current IT landscape. Reduce IT costs by choosing one service to provide you with one concise overview.