By Mallory Beaudreau, RVP, Account Management EMEA at Apptio
With a constant influx of technologies promising enhanced productivity and streamlined processes, it’s no surprise that tech estates often expand unchecked, adding layers of complexity and cost. This adds a lot of pressure for finance teams, with the rapid adoption of generative AI tools, cutting edge cloud infrastructure, and IT services all driving up spend while budgets are also increasingly being scrutinised. As a result, many of my clients are now asking, how do we cut spend effectively without compromising on operational efficiency and business value?
When reducing IT costs, it’s crucial to evaluate spend based on how the business consumes it. That requires combining cost data alongside consumption data in a way that accurately reflects your business structure. Only by layering this data together can businesses significantly cut expenses in a more considered way.
For CIOs and CTOs, the path forward to reaping AI rewards and delivering value will require clear visibility into IT costs and consumption and more alignment between business objectives and tech spend.
Understanding Value
It’s no secret that technology and finance leaders face pressure to deliver greater value while operating with constrained resources. Meanwhile, emerging technologies and new business initiatives continue to demand investment and attention. AI adoption is quickly expanding for example, with Apptio data finding that data analysis (68%), process automation(52%), and cybersecurity(49%) are the leading current use cases in the UK.
However, 89% of business leaders still don’t have the capabilities to analyse technology effectively, making it incredibly difficult to prove the ROI of these projects. If this isn’t addressed, it is only going to become increasingly challenging for executives to understand where value is being derived and where cost adjustments can be made. An understanding of spend versus output is critical.
To put this into perspective, 83% of UK businesses still can’t prove a solid ROI for their cloud transformations, despite this boom happening a lot earlier. Considering this, it’s important we don’t repeat the same mistakes with AI implementation or the integration of other new solutions, which is where technology business management (TBM) can help.
Opportunities for Success
Put simply, TBM is a critical framework that allows organisations to manage, plan, and optimise their technology spending. By offering clear visibility into costs, consumption, and performance, it equips c-suites and their teams with the tools, processes, and data needed for more informed decision-making.
While some TBM-driven opportunities deliver quick, easily actionable wins, others demand greater effort, collaboration, and stakeholder involvement. These three IT cost reduction strategies will help you establish a TBM approach that delivers tangible results, starting with foundational actions and progressing to more complex, high-impact initiatives.
- Unify: Alwaysstart by centralising all operational and financial data into one workspace, including your company’s general ledger and IT systems used by business units. This will provide organisational transparency, enabling stakeholders to understand IT costs and usage across the business.
- Rationalise: Application rationalisation has emerged as a powerful way to tackle redundant spending. Teams can identify duplicate applications, retire outdated tools, and resolve inefficiencies that slow down IT operations. One defence company for example, is on a three-year journey to bring centralised visibility to its technology portfolio, consolidating resources to eliminate duplication and maximise efficiency.
- Forecast: We’re moving past a landscape where addressing current blockers is enough; instead we need to predict and prepare for changes before they happen. Scenario planning allows you to assess how events like mergers or shifts in vendor contracts will reshape IT costs and risks. By modelling these impacts, you can make smarter decisions that balance financial efficiency with operational integrity.
As AI becomes increasingly embedded in daily operations and cloud computing remains a cornerstone of IT strategies, effective cost management is vital to maintaining control and visibility over spend. With well-designed processes in place, teams can maximise the scalability and flexibility of these technologies while keeping expenses in check and driving greater value for the business.
Final Thoughts
Technology spend is one of the most difficult areas to manage and optimise, as it is directly impacted by the rate of innovation. There are constant changes within cloud cost structures, hybrid and multi-cloud setups, and AI projects which can quickly shift business priorities. But the most important thing to remember is that maximising investments does not just mean “saving on costs”; it means delivering the greatest value to your customers while minimising necessary expenditures.
To get this process right, businesses must prioritise visibility so that teams can make data-backed decisions. Cost pressures are here to stay, but with the right tools, mindset, and strategies, organisations can navigate these challenges with confidence.
