The potential of an upcoming recession has many businesses worried about how to cut costs and stay afloat. With tech giants like Google and Salesforce laying off thousands – with possibly more to come – now more than ever, leaders are looking for ways to reduce operational costs without reducing operational efficiency. While some businesses will look to reduce headcount and dwindle employee benefits, one of the best strategies to achieve cost savings, whether there's a recession looming or not, is by consolidating your organization's tech stack. By streamlining the tools and technologies your business uses, you can reduce expenses and even increase efficiency.
Here's what we'll cover:
A tech stack, also known as a technology stack or software stack, refers to the collection of technologies and tools that a business uses to develop and run its software applications. In terms of revenue operations, a tech stack typically includes a CRM, marketing and sales enablement / automation tools, project management software, digital marketing platforms, and other tools that work together to support the business's operations. Each piece of a tech stack serves a specific purpose and interacts with the others to create a cohesive system. An example tech stack for a growing startup might look like: Pipedrive (CRM), Mailchimp (Email Marketing), Zapier (Automations), Apollo (Sales Enablement), Asana (Project Management), and WordPress (Website).
You may also have softwares in your tech stack that you use so much, you don't even think about, like Slack or Microsoft Teams, but these softwares are also a part of your tech stack.
Auditing your tech stack is an important step in the process of consolidating it. The audit process involves evaluating all of the software and services your business uses, and identifying any duplicative or unnecessary tools. Here are a few steps you can take to conduct an audit of your tech stack:
Create a list of all the tools and services your business currently uses. This should include all the software and platforms your team uses, as well as any services you pay for such as cloud storage or email hosting.
Assess each item on the list to determine its purpose and usage. Look at how often each tool is used, how critical it is to the business, and whether it could be replaced with a more cost-effective solution.
Identify areas of overlap or duplication. For example, if you have a CRM that includes email marketing (such as HubSpot), but you also have a software purely dedicated to email (such as ActiveCampaign or Mailchimp) this could indicate that you are overspending and that consolidation is possible.
Review your contract and subscription expiry dates, if you have several contracts expiring at the same time, it may be a prime time to consolidate. Alternatively, you can try to negotiate a better deal with the vendor.
Evaluate the total cost of ownership (TCO) of each tool and service, including the cost of implementation, maintenance, and upgrades. This will give you a better understanding of the overall cost of each tool and will help you to make more informed decisions about which tools to keep and which to eliminate.
Finally, once you have completed the audit, create a plan of action to consolidate and streamline your tech stack. Prioritize the tools and services that are most critical to your business and focus on eliminating unnecessary or duplicative tools.
It's important to note that the audit process should be done periodically, not just when a recession is coming, as technology evolves and new tools are being developed, your needs may change, and some tools that were once essential may now be unnecessary or outdated.
Although it may sound like it, the end-goal of tech stack consolidation is not to have as few softwares as possible. It's to have the most efficient stack of softwares possible, which means taking into account how ingrained certain softwares and platforms already are in your company. In other words, when you're performing your audit, you'll need to take into consideration the extent to which a tool is integrated and relied upon by various teams within your organization. For example, if a tool is used by multiple departments and is critical to the day-to-day operations of your business, it may be more difficult to replace or eliminate than a tool that is only used by a small team.
It's important to consider the impact that consolidating or eliminating a tool may have on your business processes. If a tool is deeply ingrained in your business operations, replacing it with a new solution may require significant changes and disruptions to your workflow. In such cases, it may be more cost-effective to keep the tool and find ways to reduce costs, rather than replacing it entirely. On the other hand, if a tool is only used by a small team and is not critical to your overall operations, it may be easier to eliminate or replace it with a more cost-effective solution.
In addition to reducing expenses, consolidating your tech stack can also bring other benefits to your business. Even though you're cutting costs, by streamlining your technology, you can actually increase efficiency and productivity. For example, if you are currently using multiple tools to manage customer data, consolidating them into a single platform can make it easier for your team to access and use that data. This can lead to faster decision-making, better customer service, and ultimately more revenue.
Another benefit of consolidating your tech stack is that it can make it easier to integrate new technologies and services. For example, if you are currently using multiple marketing automation tools, consolidating down to a single platform can make it easier to integrate with your CRM and your other softwares. Having all your automations running on a single platform can significantly help you to create more seamless and efficient workflows for your marketing and sales efforts by having all your processes and data in one place.
Consolidating your tech stack can also help to improve security. By reducing the number of tools and services you use, you can better manage and protect your data, reducing the risk of data breaches and other security incidents.
One of the first ways we advocate for clients to consolidate their tech stack is to migrate to an all-in-one solution like HubSpot. As a CRM that offers a wide range of features inside of one tool, including email marketing, website and landing page creation, marketing and sales automation, pipeline management, reporting and analytics, and more, by using a platform like HubSpot, you can often eliminate the need for multiple other tools and services. With the features of HubSpot, you can easily manage your customer data, automate and scale your revenue operations, and improve your team's overall efficiency. Additionally, HubSpot is cloud-based, so you can easily access it from anywhere and collaborate with team members and partners.
As a potential recession looms, consolidating your tech stack is a great way to achieve cost savings without reducing headcount. By identifying and eliminating duplicative or unnecessary tools, you can reduce expenses and even increase your team's efficiency, along with other benefits such as improved data management, and strengthened security. A thorough audit is important to evaluate the software and services your business uses, and identify areas where you are overspending, and have duplicative or unnecessary tools. It's also important to consider how ingrained a software is in your business processes when it comes to consolidating your tech stack. Ultimately, by understanding and managing your tech stack, you can make better decisions, improve operational efficiency, and reduce costs for your business.