It’s important to regularly review your organisation’s spend on IT services, perhaps more so than other services within the business due to the ever changing nature of technology.
We have put together a list of the 10 most common ways businesses waste money on IT, which will hopefully help you when it comes to sitting down and assessing your spend on technology.
Whilst this isn’t an exhaustive list, we think it covers some of the most common issues, a lot of which are relatively painless to put into action.
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1. Cyber security under investment
Trying to save money by cutting corners on cyber security is one of the most expensive mistakes a business can make. Breaches, ransomware attacks, phishing incidents and data loss can cost organisations far more than proactive protection ever would.
Many businesses assume that “nothing has gone wrong so far,” or “we are too small to be hacked”, but modern cyber attacks are automated, constant and increasingly sophisticated. The cost of downtime, data recovery, legal action, fines and reputational damage quickly spirals.
Where money is commonly wasted:
- Recovering from cyber incidents that could have been prevented
- Paying ransomware or emergency specialist fees
- Lost productivity during downtime
- Increased cyber insurance premiums
- Using outdated security tools that no longer offer adequate protection
What can I do about it today?
- Ensure MFA (multi-factor authentication) is enabled everywhere. It’s one of the single most effective security controls.
- Keep software and systems fully patched to avoid exploitation of known vulnerabilities.
- Run regular security training to reduce phishing-related incidents.
- Review your cyber security stack, many businesses overpay for tools they don’t need or don’t use.
- Establish a solid backup and disaster recovery plan, including offsite and immutable backups.
- Use EDR – a continuous monitoring service rather than antivirus which is outdated and ineffective against hackers.
Investing early in cyber security is significantly cheaper than paying the costs of a breach.
2. Holding on to and overpaying on unnecessary software licensing fees
If you use technology in any capacity, there’s no doubt that you’ll have paid for, or be paying for software and licensing fees that come with it.
Most software now is paid for by recurring payments, known as “subscription licenses”. It is worth doing an annual audit of all the software each member of staff uses and count the licences.
It’s very easy to start overpaying without realising it. In the case of services such as Microsoft 365, many small payments can quickly add-up and so it’s important to routinely audit your license usage.
Staff might also sign up to SaaS (software as a service) with a company credit card when they had an immediate need and now you have a regular cost that isn’t be tracked.
What can I do about it today?
- Audit your license usage: ask your IT staff for a list of users and who has what license. Remove any unnecessary licenses and archive their data.
- Check your invoices: compare these with your expected license usage and query any differences. Often you end up paying for old and dormant accounts and services.
- Ask your IT team to break down the features included in each software subscription – check if you need what you’re paying for. Often, you can use a lower cost option with fewer features
3. AI Cost Sprawl
The rapid rise of AI tools and automation platforms has created a new challenge for businesses: hidden and rapidly escalating AI costs. As more teams experiment with AI, organisations often end up paying for multiple tools, unused features, duplicated capabilities or unpredictable consumption based fees.
Much like the early days of cloud adoption, AI brings huge productivity benefits, but in the early days isn’t always managed properly.
Where money is commonly wasted:
- Paying for multiple AI tools that all perform similar tasks.
- Consumption based API charges that grow quietly in the background.
- Employees signing up for AI subscriptions on credit cards without oversight.
- Premium AI features being purchased when basic ones would suffice.
- Lack of governance on data usage, model selection, and prompt volume.
What can I do about it today?
- Audit all AI subscriptions and tools across every department and look for duplication.
- Set AI governance policies to control who can buy what and to prevent “shadow AI.”
- Track usage and cost, many AI platforms provide cost dashboards, but they are rarely checked.
- Consolidate tools where possible, many productivity suites now include AI capabilities by default.
- Review consumed based billing monthly to identify unusual spikes and unnecessary usage.
Proper oversight turns AI from a growing cost risk into a genuine efficiency driver.
4. Backing up unwanted and unnecessary data
If you’re like most businesses today, you probably utilise the cloud for your disaster recovery process in some way. Cloud backup is by far the most common method, in which your key IT workloads are backed up routinely to an offsite datacentre.
Whilst this is a great use of cloud technology, it’s crucial to ensure that your costs are not running away. The key here is to remember that your costs are directly linked to your usage, the more your backup, the higher your costs, down to the single GB of data.
What can I do about it today?
- Review a report on usage;by reviewing a data audit listed by size and capacity, you can quickly spot anything out of place. One example is if your organisation uses redirected folders, which means each person’s 'My Documents' are moved to the server to protect against data loss. All well and good, until someone decides to upload their family photos and your next month’s backup charge is twice as high!
- Ask your IT team what your retention policy is for cloud backup; you need to delicately balance data protection with the cost and risk.
5. Over provisioning your cloud servers
If you are a business that utilises one of the many cloud platforms for hosting your servers, then you’ll understand the nature of subscription payments and how important it is to keep on top of things.
Cloud costs can rise quickly when resources aren’t managed properly. Zombie workloads can be a real problem, they are forgotten servers or storage volumes that are still running in the background, quietly adding to your bill.
Unused reserve happen when you commit to discounted long-term capacity but stop using the serves they were bought for.
And if autoscaling is set up incorrectly, your systems may scale up during busy times but fail to scale back down, leaving expensive extra resources running unnecessarily. These issues are common and can significantly increase monthly cloud spend if not reviewed regularly.
We managed to reduce an organisation’s cloud infrastructure costs by a whopping 50% by moving them to a more competitive platform from a provider who hadn’t been offering any due diligence on their usage.
All good cloud providers, including the three big public cloud providers Microsoft, Amazon and Google, have intricately detailed usage reports available from your account.
Bandwidth, storage and the incorrect server specification are some of the most common ways that customers using their services over spend.
What can I do about it today?
- It’s best to have an expert look over this, but there’s an awful lot of information to be gleaned from your usage reports. Common things to look out for are storage allocations, bandwidth and sever specifications. With storage allocation, you need to check whether you are paying for large amounts of storage sitting empty within your servers; with bandwidth detailed analysis of the amount of data downloaded can be insightful because most providers charge per GB, and with server specification you need to check you are not using a server that is more powerful than necessary.
- Enquire with your provider about reservations; most good cloud providers will give you the option to “reserve” your servers by paying upfront and will often provide great savings. For example, within Microsoft’s Azure platform, you can save around 45% by purchasing three years upfront. Just be sure your specification isn’t going to go down, you can increase, but you can’t reduce mid-term.
6. Holding onto old IT infrastructure hardware
With the advent of cloud technology and virtualisation, significantly less physical hardware is now required to host critical business applications and databases. It used to be the case that each workload required its own physical server, but this is no longer the norm. Today, virtual servers and cloud platforms allow multiple workloads to run efficiently on far fewer resources.
Despite this, many organisations still rely on multiple physical servers or ageing infrastructure using the “if it ain’t broke” approach. While understandable, this mindset often leads to rising costs and declining performance. Technology evolves faster than almost any other sector, and a top-of-the-line server from five years ago will often be outperformed by an entry-level solution today.
Running old or underutilised servers is expensive in almost every way you look at it. Power consumption, cooling, licensing, maintenance, backup, downtime risk and support costs all increase, often quietly, year after year. The result is not only higher operational spend, but also lost productivity and, ultimately, lost revenue.
If your organisation is experiencing slow applications, long file open times, crashes, poor file transfer speeds or general unreliability, there is a strong chance your server hardware is no longer suitable for the demands being placed upon it. There is also likely a cyber security risk and support and software might have ended.
What can I do about it today?
- Ask your IT staff for a cost comparison showing the savings from virtualising physical servers or consolidating workloads onto fewer systems.
- Identify workloads that could be moved to the cloud or delivered as a hosted service, moving even one application can sometimes make an entire server redundant.
- Review server age and performance and discuss whether replacement, consolidation or cloud migration is the most cost-effective option.
- Engage your IT experts early, whether internal or external, as they can help you assess performance issues, future needs and the true cost of doing nothing.
Modernising server infrastructure reduces costs, improves performance, lowers risk and provides a far more scalable foundation for future growth.
7. Running old computers
Often harder to detect without monitoring and tracking tools, but potentially just as costly for your organisation. Using workstations past their recommended shelf-life date (typically around four to five years) will be detrimental to the productivity of your staff and ultimately your bottom line.
What can I do about it today?
- Audit your computers. Your IT staff should be able to produce something like an asset report for all workstations in the organisation, listing the purchase date and warranty expiration.
- Replace any computers that are over five years old or aren’t suitable for the role used for.
8. Purchasing unnecessarily powerful workstations
When it comes to buying a new laptop or desktop for your staff, it’s important to make sure it’s an informed purchase. Many times, staff with roles in the company that only require a basic level of technology end up with a powerful computer that’s capable of handling much more than necessary. There aren’t any performance gains for unused resources on the computer, so ensure you work with your IT team on making the best purchase decision.
What can I do about it today?
- Work with your IT team on looking at the best specification to match the job role. It can be useful to save these specifications for future purchases for the same role.
- Review staff IT requirements regularly. A good IT team will have historical resource logs for each computer, which is invaluable for making good purchasing decisions.
- If you have an IT provider, they can help you with purchasing equipment and will ensure the most cost-effective and suitable equipment is recommended.
9. Taking on and retaining expensive IT staff
Highly skilled IT staff can be an attractive prospect for your business, but at a significant cost. An experienced and highly qualified IT systems administrator’s salary can easily run into six figures. Whilst there is certainly not a “one size fits all” structure for an organisation’s IT support provision, it’s important to think very carefully about taking on staff, particularly recruits demanding a top salary.
What can I do about it today?
- Ask yourself if you really need such a high level of expertise in-house. Speak to your contacts, what are their experiences?
- Seriously consider outsourcing at least a portion of your IT provision to an external company. This can prove much more cost effective and often land you with a better service without the hassle of retaining skilled staff.
10. Not using the correct internet connectivity
Prices of internet fluctuate. Often it slowly increases each year, until you speak to your provider.
Look at the contract you are currently on and see if you can find better elsewhere. If you can, you can either move or ask your current provider if they can beat the deal you’ve been offered.
The bottom line when it comes to saving money on IT?
Bringing IT costs under control is not about cutting corners. It is about cutting waste. The biggest drains we see are avoidable: under investing in cyber security (which turns small gaps into costly incidents), vendor sprawl that duplicates services and blurs accountability, and outdated servers and workstations that quietly erode productivity and inflate support, energy and downtime costs. The fix is simple but disciplined: audit what you have, consolidate where you can, modernise what no longer serves you, and protect the core with strong cyber hygiene.
If you tackle just these areas first, you’ll reduce spend, improve reliability and free your teams to focus on growth not firefighting. If you’d like help turning this into a practical action plan, we can review your environment, highlight quick wins, and build a rightsized roadmap that pays for itself within months.
