
Why Risk Management is Critical for Small Business Success
Small businesses are full of ambition, creativity, and passion,…
Let’s face it: IT budgets have a sneaky way of ballooning out of control. The average business wastes a jaw-dropping 30% of its IT spend on inefficiencies, redundancy, and poor management. That’s tens of thousands of dollars—money that could be fueling growth instead of lining the pockets of software vendors and ISPs. The good news? You can reclaim a chunk of that cash with some strategic housekeeping. Here’s your roadmap to finding—and fixing—the top 10 IT money pits.
1. Office 365 License Chaos
If you’re not careful, Office 365 can become the Wild West of your IT spending. Companies often hold onto unused licenses or keep paying for accounts that should have been deactivated months ago. Without proper oversight, you might even end up paying for duplicate licenses or features no one is using.
Every inactive license isn’t just a waste of money—it’s a potential security risk. Inactive accounts can be exploited by bad actors, creating vulnerabilities in your system.
Start by conducting an audit to identify unused licenses and accounts. Then, automate the offboarding process for departing employees to ensure licenses are deactivated immediately. Long-term, consider tools that provide real-time insights into license utilization and set a schedule for regular reviews.
2. Paying for Dead Services
It’s easy to forget about services you no longer need, especially if they’ve been running quietly in the background. Think old ISP lines for closed locations, landlines nobody uses anymore, or software subscriptions that haven’t been touched since onboarding.
These legacy services aren’t just a financial drain—they also add complexity to your IT environment, making it harder to manage and maintain.
Begin with a comprehensive inventory of all your IT services. Cancel anything that’s no longer needed and document all contracts with their renewal dates to avoid auto-renewals. For long-term management, invest in a centralized service tracking system that provides visibility into your ongoing expenses.
3. Cloud Overload
Migrating to the cloud has many benefits, but if you simply lift and shift your existing workloads without optimizing for the new environment, you’ll likely end up with a bloated bill.
Without proper planning, you could be paying for cloud resources you don’t need or using inefficient configurations. This is particularly common for businesses that overestimate their requirements or fail to manage their usage during off-peak hours.
Start by identifying underutilized resources and shutting down anything idle. Adjust configurations to match actual needs, and implement tools that automate scheduling for non-essential resources. Over time, consider adopting a cloud-native approach and creating a dedicated financial operations (FinOps) strategy to continuously monitor and optimize cloud spending.
4. Hoarding Hardware and SaaS Subscriptions
You probably don’t need a room full of spare laptops or a dozen software subscriptions that do the same thing. This kind of hoarding often stems from a “just in case” mentality, but it’s a costly habit.
Unused hardware depreciates rapidly, turning valuable assets into dead weight. Meanwhile, SaaS sprawl leads to paying for tools your team doesn’t fully use, wasting money and creating inefficiencies.
Perform an inventory audit to identify underused hardware and subscriptions. Consolidate tools where possible and establish clear procurement guidelines to avoid future waste. Long-term, implement a governance framework to manage hardware lifecycles and software subscriptions.
5. Underutilized IT Talent
Your IT team shouldn’t spend their days resetting passwords and troubleshooting email issues. Yet, without the right tools and processes, that’s often what happens.
Routine tasks eat up valuable time that could be spent on strategic initiatives. This not only delays important projects but also stifles innovation and growth.
Automate repetitive tasks and empower employees to handle common issues with self-service tools. For larger workloads, consider outsourcing to managed service providers. Over time, focus on training and reallocating your IT team to high-impact projects that drive business growth.
6. MSP Contracts on Autopilot
Managed Service Providers (MSPs) can be a lifesaver, but only if their services align with your needs. Many businesses let these contracts run on autopilot, paying for outdated or redundant services.
When your business evolves but your MSP contract doesn’t, you’re left with services you don’t need and gaps in the ones you do. Plus, emergency add-ons can add significant costs if not planned for.
Regularly review your MSP contract to ensure it meets your current needs. Discuss service utilization metrics with your provider and renegotiate terms as necessary. Establish a quarterly review process to keep everything aligned.
7. Stuck in Telecom Stone Age
Analog phone systems and outdated telecom contracts are a classic example of sticking with “what’s always worked”—even when better, cheaper options exist.
Maintaining old systems is significantly more expensive than modern VoIP alternatives. They’re also less scalable, meaning you’re likely paying a premium as your team grows.
Assess your current telecom setup and identify areas where modern solutions can save money. Migrating to a VoIP system not only reduces costs but also unlocks features like video conferencing and mobile integration that boost productivity.
8. Printing Gone Wild
Printing might seem like a small expense, but it can add up quickly—especially if you’re not tracking usage. Many businesses maintain multiple printers with little oversight, leading to unnecessary spending on equipment, maintenance, and supplies.
Unmanaged printing can cost up to 3% of annual revenue, with much of that going to waste on supplies and underutilized equipment.
Implement print monitoring solutions to track usage and establish company-wide printing policies, such as defaulting to double-sided, black-and-white printing. Consolidate your printer fleet to reduce maintenance costs.
9. ISP Contract Complacency
Internet Service Providers (ISPs) are notorious for raising rates when contracts auto-renew. If you’re not paying attention, you could end up locked into a high-cost plan that doesn’t even meet your needs.
You might be overpaying by 15-25% compared to market rates. Worse, outdated contracts often lack the flexibility to adapt to your evolving requirements.
Benchmark your current rates against competitors and negotiate for better terms. If your ISP isn’t willing to budge, explore switching providers. Make contract reviews an annual habit to ensure you’re always getting the best deal.
10. Security Overload
When it comes to cybersecurity, more isn’t always better. Businesses often pile on tools with overlapping functions, creating inefficiencies and making management more complicated.
Overlapping tools don’t just waste money—they can create gaps in your security coverage due to poor integration. Plus, managing all these tools takes up valuable time.
Conduct a comprehensive review of your security stack to identify redundancies. Consolidate tools where possible and focus on creating a streamlined, effective security architecture.