IT Cost Optimization: 7 Strategies Backed by Real Success Stories

In the face of ongoing economic uncertainties, organizations must exercise careful spending discipline while simultaneously gearing up for their future growth. Financial considerations thus become an essential aspect of business functioning in general and IT operations in particular.

In today’s article, we will share strategies that ensure IT cost optimization based on our hands-on experience working with global top performers. We will provide real-life examples of actual solutions and strategies we have used to increase efficiency and optimize IT costs for our clients. 

Technological shift and IT cost optimization strategies

According to a Gartner report, IT expenditures reached $4.5 trillion in 2023, marking a 2.4% rise from the previous year. Despite the impact of inflation on consumer purchasing ability, leading to reduced device spending, the forecast indicates considerable enterprise IT spending. Investment in innovation and growth tends to pay off generously, especially when the world comes around a new technological shift.

Business stakeholders need to collaborate to execute a thoughtful and rapid reduction in costs. This involves a detailed analysis of each focus area while strategically positioning the organization to foster new growth and innovation. The CIO, in cooperation with enterprise leadership, faces the challenge of balancing the cost-optimization measures with the potential value that reinvested savings can bring to the business. 

Yet, striking this balance is not a one-time undertaking—it’s a life-long process that demands continuous focus and scrutiny in light of changing circumstances, needs, and capabilities. 

Acknowledging the fact that it would be rather difficult to implement all the IT cost optimization strategies at once, our experts offer a list of essentials that will help an enterprise initiate or gain strong momentum on the path to improved IT cost efficiency.

1. Audit the existing IT resources

Large enterprises often have vast IT ecosystems that include hundreds of software solutions each serving the needs of a particular department or group of employees. These solutions require regular development support, server provisioning, and sometimes a product team that gradually improves the app, leading to additional IT spending. The challenge of keeping up with all developments often leads to two major outcomes: 

• Duplication of effort: This problem arises when a company is so large and creates so many applications that its leadership forgets these solutions even exist. In such cases, apps begin to overlap in functionality. As a result, large companies repeatedly invest in solutions that serve similar purposes or even fully duplicate each other’s functionality. 

• Product abandonment: The products that could have brought value but were unjustly forgotten are another reason why businesses lose money on IT operations. Either the products lose user’s attention as they were not properly optimized or they are hopelessly outdated. As a result, assets that could have worked for the enterprise’s benefit, remain dormant and either drain resources or hinder employee performance.

Both of these problems call for an audit of IT resources and the available products within the company. The businesses need to check and verify to what extent each application is used and whether the resources are spent rationally. Perhaps some functionalities could be consolidated, redesigned, or replaced with another product. Some apps could be merged, and others shared with adjacent departments. 

Such an audit must take place before launching any new software development project. ​​It is also essential to validate the feasibility of investing in the project; what kind of value the project will deliver and whether it is even necessary for the company. 

For this, the enterprise can develop its own rationality assessment system. Sometimes the decision will be in favor of additional features for existing projects, or it will reveal that a similar product already exists, or that there is a suitable third-party solution. In some cases, the future value may be insufficient to invest in the product. 

This simple yet highly effective approach will bring millions in saved expenses, optimized investments, and earned revenue.

2. Automate as much as possible

We are, without doubt, witnessing a major shift in enterprise operations with automation growing into a major productivity and cost efficiency enabler. Certain tasks that used to take dozens of human hours, can now be automated and performed faster, more accurately, and cost-efficiently. Some of the most notable benefits of automation for IT cost optimization are based on its innate ability to increase the efficiency and accuracy of task performance.

IT departments can automate a large portion of repetitive, rule-based tasks while making sure they are performed with the utmost precision and quality. More so, automation tools perform such tasks in just a fraction of the required human hours. 

AI-driven automation of IT operations mitigates the risk of downtime by swiftly addressing testing issues and resolving them without disrupting the workflow. Unlike conventional test automation tools, which could lead to QA interruptions due to object identification issues, the advanced capabilities of AI-powered testing prevent manual fixes and enable seamless continuation of the testing process.

How to ensure success in automation efforts?

Most executives seek increased efficiency and profit, but it is better to start not from what they want but from what they truly need. Figuring out the need will entail a list of automation candidates or specific departments and processes that would benefit from automation the most. 

In general, the criteria for identifying an automation candidate include the following questions:

• Does it involve manual interaction with an IT system?
• Is it prone to human error?
• Are its processes rule-based and logical?
• Is it a repetitive task?
• How much time does it take to complete?
• Does it deal with formats and structured data?
• Can it be executed without human involvement?

While the initial inclination might be to automate numerous processes throughout the organization, depending on its size, the list of candidates could grow beyond reasonable measures. However, to execute a successful and gradual automation, it is imperative to move with the candidate that yields the most significant impact.

Automation is front and center of most IT cost optimization efforts these days and for a good reason. It touches almost every aspect of the enterprise’s functioning and is at the core of technological shifts across domains. The adoption of big data, cloud computing, the creation of digital workspaces, the standardization of development practices, and more are all connected to automation solutions in one way or another. For instance, intelligent automation paired with advanced analytics play an increasingly important role in IT cost optimization helping enterprises analyze and detect patterns, subsequently informing strategic business decisions.

The bottom-line impact of switching from manual to automated processes

Our Big Four client needed to address the mounting workload on tax departments. During peak seasons, the tax department had to navigate around 60,000 sets of documents for reconciliation. Given this escalating workload, there was a pressing need for comprehensive workflow automation to maintain high service quality standards.

To address these challenges, we leveraged our expertise in intelligent automation to elevate the efficiency and accuracy of its tax department. As a result, Trinetix conceptualized and developed an automated solution that spans the entire process, providing critical advantages to the financial departments:

• Ensuring cost-effectiveness and a high ROI through a tailored, platform-agnostic development approach.
• Enabling rapid and precise handling of extensive data volumes, positioning the tax department for a competitive edge in professional tax services.
• Liberating up to60,000 human hours annually, allowing tax experts to redirect their efforts to tasks of greater strategic importance.

3. Rethink your approach to data

Big data and data analytics have emerged as powerful tools in the realm of IT, providing significant contributions to IT cost reduction strategies. At the same time, failure to use data properly can create redundant complexity and hinder cost efficiency.

As enterprises grow, enter new markets, engage clients, or conduct any other business activities, they generate more and more data. Unstructured, unorganized data can become a liability rather than an asset. It is paramount that they keep the data clean, properly stored, optimized, and secure to prevent data loss or duplication.

Viacheslav Korchenok, Business Unit Leader

Using faulty data and obsolete data centers can lead to serious implications. For instance, using outdated data on tax filing policies in a particular region of operations can result in errors during tax filing. In such a case, a financial services provider will incur fines and reputational losses. 

By analyzing properly structured and timely updated datasets, organizations gain insights into their internal processes and external factors, identifying inefficiencies, and streamlining workflows. By focusing on modernization and consolidation initiatives, these efforts can yield cost savings ranging from 10% to 20% of the overall data center budget. 

Here are several essential steps for improving the efficiency of data and modernizing the data centers:

• Standardize the data: Develop a standard for data input or configure the system to recognize diverse data entries, thus minimizing mistakes and duplication while filling the data forms.

• Enable 360 view on data: Mitigate data silos by consolidating data in a single, secure cloud-based space, ensuring easy access for authorized personnel while reducing data latency.

• Optimize real-time data processing: Automate data management processes as information flows in, generating metrics reports based on fresh data received within minutes or even seconds. 

• Shift from manual data entry: Adopt data optimization tools with automated input features to minimize the time-consuming nature of manual entry and reduce the associated error rate.

The implementation of big data analytics solutions allows organizations to make data-driven decisions, optimize operations, and strategically manage resources. At the same time, the efficient use of data requires continuous modernization, optimization, and structuring. This, in turn, contributes to IT infrastructure cost optimization and helps organizations achieve greater efficiency and competitiveness.

Our experience creating efficient data centers for enterprise product transformation

Our Fortune 500 client was building a massive one-stop solution for solving all audit and insurance tasks of their customers. Yet, the existing solution was too expensive to maintain, plagued with multiple bugs, and admitted no opportunities for scaling. In response, our team implemented systematic architecture adjustments and cutting-edge functionality enabling the client to achieve exponential customer growth. 

One of the important facets of our work was integrating data reuse functionality to automate auditors' tasks, enabling the restoration of past engagements and their seamless continuation into the subsequent fiscal year. As a result, we have reduced enterprise expenditures on inefficient data storage through the execution of a comprehensive IT optimization strategy.

4. Optimize cloud costs

Transition to the cloud is long and well-known for producing a strong and positive impact on IT cost optimization. Through cloud enablement, businesses can cut the need for equipment, reduce maintenance costs, right-size their spending, and more. However, at the same time, the rapid and extensive use of cloud services can sometimes result in disorder and overhead expenses. 

Enterprises often allocate funds to resources that go unused or remain idle. As organizations migrate more workloads, managing the associated challenges becomes increasingly complex. The users must also account for the workload spikes occurring multiple times daily throughout an entire cloud billing period. As a result, an enterprise would be looking at substantial cloud costs in such a case.

1. Identify unused resources: The most straightforward approach to optimizing cloud costs involves searching for unused resources. It is common for an administrator or developer to initiate a temporary server for a specific function and forget to deactivate it once the task is completed, which leads to charges for unused resources. 

2. Streamline idle resources: An idle computing instance with a CPU utilization level as low as 1-5% can result in a significant waste when billed at 100%. A crucial strategy for cloud cost optimization is to identify such instances and consolidate computing tasks into fewer instances.

3. Use heat maps: A heat map serves as a visual representation of peaks and valleys in computing demand, offering valuable insights for establishing start and stop times to minimize expenses. While administrators can use automation to schedule instances for starting and stopping, thereby optimizing costs.

4. Optimize service sizes: The process of right-sizing involves analyzing computing services and adjusting them to the most efficient size. Utilizing right-sizing tools provides change recommendations across instance families, aiding in the reduction of cloud costs and the optimization of cloud usage. 

5. Prevent vendor lock by going hosting-agnostic: Opting for hosting-agnostic deployments provides flexibility, mitigating the risk of vendor lock-in and enhancing availability. This approach grants flexibility, minimizes risks of keeping operations within a single infrastructure, and ensures infrastructure scalability.

Cloud is all about built-in stability and cost-efficiency, even when it comes to the largest enterprises with hundreds of thousands of employees. However, it does not mean that on-prem infrastructures have become obsolete. On-prem data centers or just clusters can be used for critical office IT operations, some financial transactions, and very sensitive information storing.

Viacheslav Korchenok, Business Unit Leader

Our experience building hosting-agnostic solutions for improved efficiency

Our client struggled to overcome limitations posed by legacy products and execute a strategic, cost-effective transition to the cloud. The prevailing monolithic architecture hindered the company from meeting customer expectations and making their product accessible via cloud.

Through extensive collaboration with the client's team and end-users, alongside a phased cloud implementation strategy, our team delivered substantial benefits for the client:

• Facilitated flexible platform hosting choices for end-users, leading to improved customer satisfaction.
• Reduced customer onboarding time.
• Achieved operational cost savings through optimized processes.
• Unlocked product growth and scalability for future expansion.

5. Streamline and standardize IT practices

Enterprise-wide discrepancies in IT practices can lead to accumulated inefficiencies over time. With hundreds of software solutions per enterprise, each serving the needs of different departments or individuals, it is essential to standardize and unify software development practices. 

• Systematization

Standardizing software development practices ensures consistency, predictability, and reliability in delivering software products. Creating specific standards for coding, testing, deployment, and other stages of product life-cycle will ensure consistency in delivery. It helps in minimizing variations in development workflows, making it easier to manage and control the entire process.

• Templatization

The templates serve as predefined structures for coding, testing, documentation, and other crucial activities. Using templates ensures that development teams adhere to established norms and guidelines, streamlining their efforts and reducing the time required for repetitive tasks.

• Design standardization

Design standardization involves maintaining uniformity of a UI kit. Consistent design standards and visual language contribute to improved readability and ensure that developers follow a unified approach to design, resulting in faster releases of new features and more user-friendly software solutions.

Having a clear structure to the software development process creates a consistent IT cost optimization framework. That way, an enterprise can avoid redundant reworks and duplication of effort, increase the quality of software products, and speed up the development processes. Let us take a look at one of the real-life examples of how process standardization influences the efficiency of IT workflows. 

How we built a centralized enterprise chatbot development platform 

Our Fortune 500 client encountered the problem of uncoordinated IT efforts. The company successfully implemented digital assistants (DAs) several years prior and more teams decided to build chatbots for their needs. The chatbots created often served the same purpose, leading to inefficient time and resource spending.  

Trinetix helped the client develop an enterprise-level digital assistant platform, with a robust infrastructure, unified knowledge base, and reusable components for chatbot creation. As a result, we have achieved:

• 90% reduction in costs for DA skill development.
• A single non-technical employee is now sufficient for the creation of a skill.
• Reduced simple skill development from 2-3 weeks to just 1 hour and complex skills from 1 month to just 1 week. 
• Digital assistants exhibit a 5X improvement in understanding user requests.

6. Consider building a digital workplace

Enterprise growth is the primary catalyst for the transformation toward a digital workplace. The modern workplace functions as the company’s remote control, enabling new levels of productivity. However, digital workplaces are not a universal solution for all types of enterprises. There has to be a specific need for a unified platform that substitutes a multitude of disjointed systems.

Throughout our experience, we've encountered businesses hesitant about workplace transformation. The uncertainty surrounding digital workplace outcomes often stems from businesses' reluctance to undertake a comprehensive transformation strategy, fearing the risks associated with such drastic changes.

The most common obstacles hindering the implementation of digital workplace initiatives encompass:

• Insufficient digital dexterity and resistance from employees
• Misalignment among company leadership
• Absence of innovation-ready digital infrastructure
• Recognition of financial risks

With a shift towards automation of routine processes, the organization of processes under the umbrella of a digital workplace can liberate employees to concentrate on important, impactful tasks, reducing the time spent on manual workflows. 

How digital workplaces impact enterprise efficiency: Trinetix experience

To provide a clear vision of the impact digital workplaces make on enterprises, let us share one of our client stories. Our Fortune 500 client aimed to enhance the daily operations of administrative assistants. This encompassed tasks such as calendar management, handling business expenses, managing emails, and processing various requests across different channels.

Our team successfully implemented an intelligent digital workplace, ensuring immediate access to real-time data, customized components, and third-party tools through comprehensive dashboards, resulting in:

• Annual cost savings exceeding $450K
• Liberation of over 7K hours annually
• Enhanced operational efficiency
• Mitigation of risks through real-time visibility
• Improved service quality and accessibility
• Accelerated speed and increased accuracy in decision-making

7. Opt for custom enterprise software

Large corporations could benefit from developing their own internal software suits rather than paying for subscriptions and licenses. For instance, paying for a suite of basic productivity applications can over time aggregate into considerable expenses for businesses with thousands of employees. In such cases, building a custom in-house suit of similar applications can be a much more cost-efficient decision. 

Given the sheer number of employees, even the most bare-bones suite of licensed software will compound into millions spent over the years, at which point, building custom software becomes a more cost-efficient solution. A one-time development investment, even with the added costs of maintenance and new features, will become a massive step toward IT cost optimization and will begin to save money in the long run. 

In our practice, large enterprises are much better off creating their own custom software suites. If a company has tens or hundreds of thousands of employees, paying a couple of bucks a month for a productivity app for each employee might not be the most cost-efficient route. An investment into a tailored software package built specifically for the needs of the business might free up tremendous resources in just a couple of years.

Matvii Kurochka, Technical Delivery Manager

Implementing IT cost optimization strategies for maximum impact

As enterprises grow in size and expand their operations, the application of effective and relevant IT cost optimization strategies becomes an increasing concern. By optimizing the cost of IT operations, enterprise leaders can free up resources for more innovative endeavors that would propel the company’s digital agenda forward. This, in turn, would provide opportunities for further growth.

It is easy to see connections between the strategies we’ve listed above, and especially the defining role of intelligent automation in most of the current technological advancements. Partnering with a reliable technology vendor who has hands-on experience implementing all of the relevant IT cost optimization services can be a crucial step toward achieving the enterprise’s efficiency goals. As a technology partner to Fortune 500 and Big Four enterprises, Trinetix offers exactly that.

Let’s chat and discuss how we can reinforce your existing IT cost optimization practices and implement the new ones!