By taking control of IT spend and establishing a structured approach to cost optimisation, businesses can maximise the impact of technology. Smarter spending will ensure that organisations are getting the best value from technology investments, improving efficiencies, reducing waste and moving IT spend from reactive to proactive. IT leaders should be looking for ways to continuously rationalise spend, optimising unproductive resources to enable investment into high-performance emerging technologies.
Cost tracking is critical
Tracking IT spend is crucial for success, yet many organisations struggle to achieve this. A study by McKinsey and the BT Centre for Major Programme Management at the University of Oxford reported that on average, large IT projects run 45% over budget, while Gartner research from 2024 indicated that 60% of enterprises would underestimate cloud and platform consumption rates. This can lead to overspending, inefficiencies and challenges justifying IT spend to stakeholders.
If you’re not already on top of IT spend, start with an audit looking at everything from operational expenses such as subscriptions and licences, to capital spend on hardware. Include staff, training and infrastructure maintenance, along with any cloud spend such as subscription fees, migration costs, storage and bandwidth. Forecast this spend for the lifecycle of the resource, looking at longer-term expenses such as upgrades and renewals. Working out your IT TCO (Total Cost of Ownership) in this way creates greater transparency. Regular audits and consistent tracking will help you to make more informed, strategic decisions going forward, with stronger forecasting and better budgeting creating more effective results. This can help you to avoid the unexpected financial strains that come with estimated IT spend.
Consolidate to cut costs
One way to optimise IT spend is to streamline your operations. Again, this process should start with an audit so that you can ascertain which resources are underutilised. Statistics show that businesses waste billions every year on unused licences, duplication of data and inefficient hardware, to name just a few examples. Look to identify which areas can be consolidated to create not only cost savings, but better efficiencies too.
This could start with hardware. By regularly reviewing hardware usage to understand whether systems are being used efficiently, you might decide to retire old machines, deploying virtualisation technologies to optimise utilisation and reduce costs. The same goes for storage. By cleaning up data you can reduce storage spend, but you could also centralise your data storage, moving it to the cloud to improve access and redundancy whilst optimising spend. And don’t forget to address your tech stack. How many tools is your organisation paying for that aren’t being used? How many licences are you paying for, and are they all needed? Could you replace any of this with standardised solutions? By aligning your tech with business objectives and rationalising your infrastructure and systems, not only will you optimise spend, but you’ll also be on the right path to creating agility and accelerating innovation.
Accelerate with automation
Harnessing automation is an effective way to optimise resources to improve efficiencies and ultimately reduce costs. If you can automate routine IT tasks, streamlining workflows and processes, then you can create efficiencies that will create better cost management.
The type of automation you deploy will of course depend entirely upon your line of business, but automation can be harnessed to help with a vast range of tasks, from software updates, system monitoring and backups, to data entry, invoicing or report generation while technologies such as simulation can help at the coalface to reduce bottlenecks and speed up production. By reducing the amount of manual work carried out in your business, whether that be IT tasks, service activities, production or logistics, organisations can free up resource for more strategic work, lowering operational costs and driving innovation and growth.
Be savvy with security
Maintaining strong levels of security whilst controlling budgets is a delicate balancing act. Underinvest in security, and you could be risking breaches which would likely cost your business way more in the long run. But by adopting a risk-based approach, smarter strategies and leveraging automation, you can optimise your security investment while still protecting against the most critical risks.
Tailored security solutions which harness unified platforms can be more cost effective than managing multiple disparate security tools. Centralised SIEM (Security Information and Event Management) can help reduce costs whilst improving security incident response times. Consider adopting Zero Trust Architecture (ZTA) to reduce the complexity and cost of security measures across the network and automate access control to reduce the requirement for costly manual processes.
Depending on the size of your business, you could also look at outsourcing your security operations. Building and maintaining an in-house SOC (Security Operations Centre) is a costly exercise with Security Magazine estimating that the average organisation spends upwards of $2.5 Million per year to run an in-house SOC. Outsourcing your security to a cyber security MDR specialist can not only be more cost effective, but it can also help businesses to meet compliance and governance requirements.