The concept of ‘doing more for less’ that the IT industry has adopted is not working. Brands can find a way out of a difficult situation if they stop cutting costs and start to optimise them. Here’s how to do it.
IT departments are laying off people, but, paradoxically, they are struggling with a shortage of technical talent. According to 28% of IT leaders, the latter is the main obstacle to digital transformation.
This shows that the path to a thriving business does not lead through mindless cost-cutting, which is meant to boost short-term profitability. The concept of ‘doing more for less’ is hardly sustainable given the complexity, risks and importance of IT.
Although global IT spending is expected to reach a record $5.6 trillion this year, much of the budgets will only offset price increases in current expenditure.
Instead, brands are advised to optimise costs to increase efficiency. This approach would also free up resources to invest in long-term growth opportunities such as innovations or expansion into new markets.
A trending solution among companies is outsourcing IT talent. It requires only a portion of the costs needed to employ new people. For smaller companies, but also larger brands, this represents an effective strategy to save costs and time.
‘Freelancers are becoming an increasingly large part of many companies’ teams and make up as much as 20% of the Fortune 500 workforce,’ says Pat Petitti, CEO of Catalant Technologies.
Nevertheless, the competition between different industries for IT talent is creating interesting opportunities for professionals outside of traditional technology companies.
At Cornell University, the proportion of computer science graduates entering the financial services industry increased from 16% in 2022 to 22% in 2023. The reasons for this are the stability, social prestige, and the innovations driven by AI and digital transformation offered by IT departments in the financial sector.
Furthermore, while salaries for comparable positions are similar in both sectors, IT companies no longer offer their teams the luxury benefits they once did. For many, the opportunity to work at JPMorgan Chase is equivalent to a position at Google.
Interested in growth? Learn how you can optimise your IT department’s costs:
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If you’re looking to increase efficiency, you can find valuable information about outsourcing IT experts here.
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