Here are my top tips on how to cut your IT budget in a recession. You can't eliminate usage of IT unfortunately - it's always something you have to spend money on, however there are a lot of simple ways you can make better use of your existing infrastructure rather than spending out!I've grouped this into some approximate categories.

Firstly, there is hardware itself:

Upgrade

Plenty of IT managers work on the 'replace it in 3 years' principle with hardware assets - this makes sense in a boom period as you get the Total Cost of Ownership (TCO) benefit of having warranties on all your equipment, however if you have equipment that is approaching it's replacement point, it makes more sense to carry out smaller scale upgrades rather than replacing. Simply increasing the memory in most modern PC's and servers will give them an additional lifetime, and this costs tens of pounds instead of hundreds. You would be surprised how much quicker a PC or laptop runs with extra memory.

Extend

You can also extend warranties for most hardware as well - certainly a lot cheaper than replacing in most circumstances. Unlike your home appliances where the extended warranty might not be worth the money (and have been branded a rip-off by certain watchdogs), IT warranties often include guaranteed response times or even replacement hardware within a timeframe, which is business critical.

Virtualise

Rather than buying new servers, you can use virtualisation software to 'create' additional servers on your existing hardware - this can save massive amounts of money in terms of hardware assets, and if you are running Enterprise licenses the software is also free. Even the software need to virtualise is free (VMWare Server or ESX Server - check out www.vmware.com).

Read more on my blog here.

Sell your old stuff

Almost every company I've ever been involved with in has a cupboard full of old IT stuff - it doesn't have much value, but you might be able to recoup something for it. It's also environmentally friendly. (You can't actually throw it away, and recycling it normally costs you money). Ebay is your friend.

Lease, don't buy

Nowadays you can lease everything you need - Exchange Servers are available per user online, you can lease your Windows / Office licenses, lease hardware, lease printers.

Secondly, software:

Go open-source

This is a big change to look at, but if you really must buy lots of new software this year, look at products like OpenOffice, Google Apps or other online providers. You might not want to switch servers to Linux (unless you have the skill base to do this), but changing the desktop apps instead of upgrading them can be a good idea.

Software Assurance and Open Value/Volume

If you do go down the Microsoft Route, get the best deal from your licenses by ensuring you are on the right plan (hint: don't buy boxed products!) and look at software assurance as it's much cheaper than upgrading to the next version when it comes out! Be aware of the pitfalls of buying OEM software (you can't move the licenses around) and make sure you buy the right version of Office (costs can vary by 300% depending on version and license type).

Skip a version

Never more pertinent that now with Windows Vista and Windows 7 - skipping a version of the software (if you don't have software assurance obviously!) saves you a whole upgrade cycle of licensing, rollout and downtime. Windows 7 will be released either end of this year or early 2010 (probably the latter...) so why upgrade now?

Next, IT Services in general

Review contracts

Something you should always be doing, but more important now. If you are using external backup services, web hosting, internet connections, antivirus software, SaaS providers, outsourced support etc. review the costs of those and shop around a little. The market place has changed dramatically over the past few years - a lot of traditional internal services (e.g. anti-spam) are better served online, costs for internet connectivity are a lot cheaper now. We have done this for some suppliers and are looking at reducing costs by 50% or more on some services.

Hotdesk

If you have 10 sales people and half of them aren't in the office all the time, you don't need 10 desks! Downsize the office, sub-let space if your contracts allow and reduce your expenditure.

Telework

With fast home broadband and small (and usually cheap) changes to infrastructure you can have your staff working from home, or mobile working with mobile broadband cards. This is so simple to setup, and you probably already have most of the software and hardware to do it! Imagine not having to pay rent, or having to pay a lot less for a virtual office? This also helps improve staff morale, plus is greener as people aren't driving around all the time.

Review your Backup and DR plans

If you don't have them, get them done. If you do have them, check that they include key suppliers disappearing. Think about all your key IT services - support, connectivity, backup - do you know what would happen if one of those providers disappeared! Also a good time to make sure everything is up to date (have you changed/added anything recently etc.?) This ties in with points above as well - do you really need mission-critical hosting for your website? Could you drop to a lower-scale plan?

Outsource

If you are employing full-time IT staff, look at outsourcing them - this can save you a lot of money, plus you'll often end up with additional cover. If you have already outsourced, review the costs of your outsourcing - is it working? Are you getting Value for Money?

Something everyone does - printing:

Investigate pay-per-copy printing/copying

This can save significant outlay - if you are looking at new copiers/printers there are lots of companies that will supply you with a fully maintained copier/printer and you just pay per print/copy. This saves the capital outlay and lets you pull the ongoing cost from different budgets.

Stick to one printer type

This is a simple and powerful trick - if you only buy the same kind of printer across your organisation (obviously depending on your needs - you might need two or three types) then you only need to keep one stock of consumables. If you buy whatever printer is on special that month you'll need a warehouse to store the consumables in which is just tying up capital.

Go Laser

Inkjet printers look cheap to buy, but the cost per page is horrendous (it can be 1,000% more expensive to print a page of inkjet print - especially if you are using inkjet paper as well!) Lasers are more expensive to buy but much cheaper to run.

Do you need a hardcopy?

This is another easy win - introduce a policy of NOT printing stuff - people print emails in order to file them (don't laugh...), people print PDF's to read them and people print several copies of a document to review each draft. Don't. Or print duplex, print multiple pages per sheet. We print meeting copies of our reports 2 pages per page, duplex. It uses 1/4 of the paper, and less ink, but still looks professional.

Ecofont!

Saw this one on the internet - it's a font with holes! The theory is that you use 20% less ink per page (saves you a lot more money with inkjets, but not a reason to keep them!).

Finally a warning:

Don't compromise on quality

The biggest mistake people make when looking at saving money is buying cheap stuff. Don't make this mistake - it will cost you more in the longer term. You might think that you can save money buy purchasing cheaper hardware, unbranded ink cartridges or internet services from less reputable agencies/countries. However this may end up costing you far more in the longer term from downtime, blocked printers and missing websites! It is a sliding scale, and finding the right balance is a difficult skill.

Hopefully these all make sense to people - please get in touch if you need help with any of them!

You'll also note that a lot of these policies are quite green as well (recycling, saving energy, saving paper) so you increase your companies green credentials whilst saving money!