Strategies To Save IT Expenses Without Sacrificing Creativity

IT executives and leaders are coming up with workable solutions to reduce spending without sacrificing transformation, from more intelligent infrastructure to closer CFO collaborations.

CIOs are in a difficult situation. Despite being urged to cut back on IT spending, they are nevertheless expected to spur innovation and maintain the company’s success. The economy is struggling, and new technologies are constantly emerging, making it more difficult to achieve both.

The good news is that you don’t have to fall behind in order to save money. Creative solutions to reduce expenses while still investing in what really matters are being discovered by several CIOs. They are eliminating outdated and ineffective processes, collaborating with CFOs to improve expenditure choices, and leveraging automation and artificial intelligence to accomplish more tasks with less resources. It ultimately comes down to operating more efficiently, not just more cheaply.

According to Arvind Joshi, COO and CFO for global technology at JPMorganChase, “lowering IT costs and accelerating innovation are not mutually exclusive.” “When implemented properly, cost restraint ought to foster creativity. To get the most out of our $18 billion technological investment, we employ a strategy that combines development, financial management, and operational discipline.

Large financial institutions are not the only ones adopting that strategy. CIOs are discovering that, as long as they remain strategic, they can stretch their tech budgets across industries without compromising innovation.

Software development engineer and data analyst Chandrakanth Puligundla of Albertsons Companies says, “As a tech lead overseeing infrastructure and platform teams, I’ve witnessed how CIOs can lower IT costs without stifling innovation.” “It only requires the appropriate tools, discipline, and strategy.”

Here are some inventive approaches to help CIOs go above and beyond expectations while achieving cost reduction without sacrificing innovation.

• Reducing unit costs and make resources available

The most important thing, according to Joshi, is making sure that all teams adhere to the same guidelines for cost control and updating cloud systems and other technology to increase their efficiency. Additionally, it entails streamlining the software development process and ensuring that engineers are accountable for their expenditures on cloud tools and services.

Because of the ongoing digitisation of both new and old revenue streams, he claims that these focal areas offer substantial dry powder for investments in innovation, expanding infrastructure, and engineering demand.

Additionally, rather than concentrating just on reducing overall expenses, aim to increase the value of each unit so that the company may accomplish more without needless extra spending.

As revenue streams become more digitalised, Joshi continues, “it is less relevant to measure absolute cost reduction because absolute technology costs will continue to grow with organic business volume growth, new products, features, and platforms.” Holding the company responsible for cutting unit costs for computing, storage, and other digital items is more crucial. This is a more accurate indicator of cost savings and efficiency.

The CIO at World Insurance Associates, Michael Corrigan, agrees. He supports the use of financial management in IT to control expenses through frequent resource adjustments and more prudent expenditure decisions.

“Teams are encouraged to innovate efficiently and stay within budget constraints by making IT costs visible per project,” he explains.

• The Use AI to Strategically Automate

CIOs should concentrate their automation plans on high-volume, complicated operations where AI may have the greatest impact, according to Lucas Tanner, CFO of Carta Healthcare.

He claims that our automation of data abstraction from clinical records exemplifies a fundamental idea: AI should enhance human labour rather than just automate it. AI copilots are used internally by engineering, revenue operations, and go-to-market teams to increase productivity without hiring more staff. CIOs can confidently reinvest human resources in innovation while demonstrating the return on investment from AI expenditures by using KPIs to measure the impact of AI.

Tristan Shortland, CTO at Infinity Group, emphasises the advantages of AI in routine IT operations, while Tanner stresses its ability to support large-scale business processes.

He said further, ”you can regain time, improve accuracy, and transition from reactive to proactive IT by identifying repetitive, manual labour areas in your IT operations and automating them.” “This not only reduces the cost of your IT, but it also frees up employees to concentrate on strategic work, innovation, and upskilling that will propel business growth.”

By managing a range of duties, including responding to enquiries and finishing IT tasks, AI can further enhance automation, says Shortland. Teams are able to spend more time on more crucial tasks and further reduce expenses as a result.

“A virtuous cycle of efficiency and progress can be created by reinvesting the cost savings from efficiency gains into innovation initiatives,” he continues.

Software firm Chronosphere’s field CTO, Bill Hineline, concurs that the application of AI to the appropriate types of tasks is the only way to speed up the innovation cycle.

He advises teams to, automating what is known, repeatable, and boring so they can focus on innovation generally and other things. Using LLMs to automate the development of test scripts and test data is among the most successful AI applications I’ve seen. These are laborious, time-consuming jobs that AI is ideal for. Additionally, they expedite delivery processes directly.

• Working in synergy with finance

Working together with finance from the beginning is essential to properly reducing IT expenses. It is simpler to make sure technology investments support the larger picture when CIOs and CFOs collaborate closely. That kind of collaboration is ingrained in the teams’ operations at JPMorganChase.

The way our organisation is structured allows CIOs and CFOs to work together as co-strategists, creating and managing an organization’s technology roadmap from start to finish, including technical, business, and security results, Joshi adds. “A common language and set of objectives are essential for successful IT-finance collaboration, which converts technical metrics into observable business outcomes.”

Big banks are not the only places where that kind of alignment occurs. It’s a wise choice for businesses of all kinds.

Kimberly DeCarrera, fractional general counsel and fractional CFO at Springboard Legal says that It helps streamline everything from budgeting to vendor negotiations to risk management when CIOs and CFOs collaborate early and often.

“Together, we can create budgets that accomplish our objectives,” she explains. Additionally, the CFO frequently plays the bad cop in talks, allowing the CIO to maintain ties with either the new or current vendor. Cooperation fosters transparency and trust, which improves organisational results.

According to DeCarrera, the CFO is equally crucial to risk management. The CFO works with the CIO to keep the business safe, whether that means managing insurance or stopping fraud. 

She further says that the CIO and CFO will be involved in decisions such as choosing insurance levels and costs, cybersecurity procedures and solutions, and employee training.

• Streamlining and clean up data and systems

Eliminating obsolete systems, useless apps, and superfluous data is one of the best ways to save expenses and improve efficiency.

Corrigan of World Insurance advises moving legacy systems to virtualised platforms and cost-effective cloud services to save maintenance costs and gain access to contemporary features. “This frees up funds that could be used for AI or cloud analytics services.”

He adds that in order to eliminate redundant or underutilised applications, CIOs must assess software and technologies.

“As teams combine on shared innovative tools, standardising on fewer platforms reduces licensing and support costs without compromising functionality,” he continues.

Many CIOs are discovering value they were unaware they had because to the same concept getting more out of fewer, better tools.

“The first step in smart tactics is to rationalise tool sprawl,” according to Albertsons’ Puligundla. Teams frequently use three or four distinct platforms to accomplish essentially the same task. Time and money are saved by streamlining processes and lowering licensing costs by combining these into fewer, more strategic instruments.

However, cleaning up outdated systems is just one aspect of the problem. Data requires the same level of care.

Rich Prillinger, senior director of platform engineering at software company Mezmo, thinks that tackling data debt, the usual practice of treating all organisational data as though it were equally valuable is one of the best strategies.

CIOs may make more informed decisions about what should be stored in expensive tools, what can be discarded, and what is just unnecessary by profiling data across systems and figuring out what is actually used. He claims that “this greatly lowers costs while maintaining the capacity for innovation and speed where it matters most.”

• Learning more and be smart about contracts and vendors

When funds are limited, effective vendor management can result in significant savings and free up funds for innovation. This is being aware of exactly what you’re paying for, negotiating better prices, and avoiding waste associated with unnecessary licenses or contracts.

The CEO of IT analyst company Valoir, Rebecca Wettemann, claims that CIOs can save a lot of money by improving their procurement procedures.

“Collaborate with finance and procurement to fully comprehend the expenditures,” she advises. This is especially crucial in settings where teams or departments may have the authority to invest in cloud computing on their own. This implies that there can be several contracts with the same vendor or for related technologies, which presents chances for volume-based bargaining and consolidation.

Undeployed licenses are like wasting money, thus CIOs should purchase for current requirements rather than volume discounts. According to Wettemann, “even a discount for licenses you’re not using is still a net negative,” and CIOs have to insist that vendors offer value-based pricing. “Look for vendors who have an ongoing optimisation practice driven by real data, not just quarterly business review lip service, and who are willing to share telemetry and other data that shows you usage and impact,” she advises.

In order to save money for more strategic investments, it is also essential to re-evaluate each licence maintenance contract.

Wettemann continues, “Paying licence maintenance when you don’t need to is an expensive habit that needs to be broken.” “To reduce your ongoing application and database support expenses while preserving application security and performance—often at a higher level than vendor-provided maintenance—look to third-party support vendors.”

The CEO of security firm 0rcus, Nic Adams, explains it more simply.

He advises CIOs to treat vendors like enemies by threatening substitute suppliers, requesting measurable concessions, and rejecting conventional terms. End-of-life platform legacy support contracts continue to generate yearly bills. Examine each contract, terminate any that aren’t supported, and redirect the funds to new projects.

These are excerpts shared by Linda Rosencrance, a freelance writer, editor, and author based in Boston, highlighting strategies for reducing IT expenses without compromising creativity.