IT Cost Reduction: Top 10 High-Impact Actions

1. Cloud & AI Operations – Control Runaway Costs

Cost Group: Cloud & AI Infrastructure

Action: Stop paying for what you don’t use

Most companies waste 40-60% of cloud spending on idle servers and oversized systems. Set up monitoring to shut down unused resources. Match your computing power to real work – not guesses about peak loads. For AI projects, track every dollar spent against real business value. AI compute costs jumped 89% in two years. Don’t let experiments turn into budget black holes.

2. Software Licenses – Reclaim Wasted Spending

Cost Group: Software & Licensing

Action: Audit licenses every quarter

Companies waste 30% of software budgets on licenses nobody uses. Check quarterly – not yearly. Remove seats assigned to people who left. Cancel tools teams bought but abandoned. Require business justification before anyone buys new software. This alone recovers 15-30% of software costs.

3. SaaS Applications – Stop the Sprawl

Cost Group: Software & Licensing

Action: Find and eliminate redundant subscriptions

Teams buy tools without telling anyone. Marketing has one system. Sales has another. They do the same thing. Find every SaaS subscription across the company. Consolidate overlapping tools. Stop departments from buying software independently. This typically cuts SaaS spending 15-25%.  Some call it Shadow IT, I call it running your business like you own it and care about every dollar of expense.

4. Vendor Relationships – Reduce Supplier Count

Cost Group: Procurement & Vendor Management

Action: Cut technology vendors by 30-40%

Too many vendors weakens negotiating power and creates high overhead to manage. Consolidate to fewer suppliers. Bigger contracts mean better discounts. Fewer relationships mean less time managing them. You gain leverage when renewals come up. Simpler management.

5. Contract Management – Renegotiate Before Renewal

Cost Group: Procurement & Vendor Management

Action: Challenge every contract before auto-renewal

Most technology contracts auto-renew. Vendors count on this. Review major contracts before they roll over. Get competing bids. Combine purchases across business units for volume discounts. Only commit multi-year when discounts justify it. Most contracts have 15-30% negotiation room.

6. Telecom Services – Eliminate Dead Circuits

Cost Group: Network & Telecommunications

Action: Audit all network services and circuits

Companies pay for network connections they no longer need. Old offices. Closed locations. Redundant links. Cloud migration made some circuits unnecessary. Review everything. Cancel what you don’t use. Renegotiate rates based on current needs – not five-year-old planning assumptions.

7. IT Operations – Automate Routine Work

Cost Group: Operations & Automation

Action: Remove people from repetitive tasks

Stop wasting skilled staff on routine work. Automate help desk tickets, system monitoring, patching, backups. Let people focus on problems that need judgment. Start with help desk – automation handles 40% of tickets without human touch. This cuts labor costs and improves response time.  If you cannot do it find a MSP that can – this is how they scale their own businesses profitably.

8. Data Centers – Reduce Physical Footprint

Cost Group: Infrastructure & Data Centers

Action: Consolidate to fewer facilities

Each data center carries fixed costs. Power. Cooling. Security. Facilities management. Going from four locations to two cuts overhead while keeping capacity. Moving from owned facilities to colocation providers can reduce costs further through shared infrastructure.

9. Talent Management – Build Internal Skills

Cost Group: Organization & Talent

Action: Train staff instead of hiring consultants

Stop relying on expensive consultants for routine work. Train existing people on cloud operations, security practices, modern architecture. Use external expertise for knowledge gaps – not as a substitute for proper training. Building internal capability reduces consulting dependency 40-60%.  Bonus – you engage your current employees in tough times!

10. Project Portfolio – Stop Low-Value Work

Cost Group: Governance & Planning

Action: Reject projects that can’t show business value

Most companies and their IT teams approve too many projects. Resources spread thin. Mediocre results everywhere. Implement strict demand management. Make teams prove business value before approval. Kill projects that fail to deliver. Focus limited resources on high-impact work that moves the business forward.

These are 10 practical actions you can take immediately.  Depending on the size of your company and spend there may be more, there may be less.  We can certainly help in more complex solutions or coach you and your team in negotiation.  Don’t hesitate to reach out and book a short call to discuss your needs.