How to Cut Costs by 20+%: Lessons from Managing $34B in IT Spend

Evaluating
and
managing
billions
of
dollars
in
IT
spending
across
400
tech
providers
in
200
countries
provides
valuable
experience
in
verified
ways
to
cut
costs
and
accelerate
IT
financial
management
tasks.
Want
to
tap
into
a
wealth
of
cost-cutting
knowledge
gleaned
from
60
IT
cost
management
consultants
who
are
engaged
in
hundreds
of
cost-reduction
projects
each
year,
saving
companies
as
much
as
20%
or
more
on
their
IT
spend?
Here
are
the
top
lessons
learned
according
to

Tangoe’s
cost
management
consultants. 

Companies
Can
Cut
Costs
by
10-40%
Across
Multiple
IT
Domains 

Creating
an
effective
methodology
for
IT
expense
management
and
optimization
is
no
longer
a
strategy
used
only
by
large
enterprises
in
specific
use
cases.
It’s
an
approach
used
widely
by
companies
of
all
sizes
and
applied
to
the
entire
IT
environment—cloud,
mobile,
network,
and
security.
Although
savings
vary
across
each
IT
domain,
an
effective
cost
optimization
program
typically
produces
significant
savings.
 

At
Tangoe,
we
commonly
see
companies: 

• Save
  20%
  on
  their
  IT
  costs
  overall 
• Save
  10-15%
  in
  telecom
  costs
  through
  service
  optimization
  and
  as
  much
  as
  20-25%
  or
  more
  when
  combined
  with
  an
  effective
  contract
  negotiation
  consultancy 
• Cut
  mobility
  costs
  by
  15-30%
  while
  improving
  both
  IT
  productivity
  and
  the
  end-user
  experience  
• Save
  15-40%
  in
  cloud
  costs,
  eliminating
  unnecessary
  services
  and
  reallocating
  underutilized
  IaaS
  and
  SaaS
  resources 
• When
  investing
  in
  an
  
  IT
  expense
  management
  platform,
  on
  average
  new
  clients
  see
  triple-digit
  ROI
  within
  the
  first
  year 

While
cloud
cost
optimization
and

FinOps
may
seem
like
a
post-pandemic
trend,
the
IT
expense
management
(ITEM)
industry
is
a
mature
market
with
more
than
20
years
of
historically
proven
results.
Known
results
allow
ITEM
providers
to
offer
clients
the
advantage
of
a
savings
guarantee,
and
with
the
market
heating
up,
providers
are
actually
making
guarantees
a
contractual
commitment. 

Acting
on
Cost
Savings
Is
Harder
Than
Simply
Identifying
Them 

In
today’s
information
age,
AI-powered
analytic
tools
make
it
easier
to
crunch
data
and
pinpoint
millions
of
dollars
in
potential
IT
cost
efficiencies.
But
then
what?
Opportunities
are
worth
nothing
if
you
can’t
capitalize
on
them
quickly.
Actioning
identified
opportunities
is
where
the
real
work
begins
and
where
speed
to
savings
is
key,
as
every
month
that
goes
by
is
a
lost
opportunity
that
increases
the
savings
you’ll
never
see.   

With
staffing
tight
and
other
priorities
taking
precedence,
all
too
often
we
see
identified
savings
go
unrealized
for
months
if
not
years.  

Given
the
criticality
of
quick
response,
leveraging
a
firm
to
implement
identified
savings
makes
sense.
Better
yet,
the
firm
should
be
able
to
automate
the
process
to
confirm
those
savings
are
actually
realized
and
continue
to
be
achieved
on
an
ongoing
basis.
For
these
reasons,
we
recommend
asking
about
professional
services
(staff
augmentation)
when
your
IT
team
is
too
overstretched. 

To
cut
costs
faster
you
also
need
an
automated
IT
expense
management
platform
integrated
with
the
service
portals
and
dashboards
of
the
technology
service
providers
themselves.
This
way,
modifications
and
service
changes
can
be
made
faster
and
with
less
manual
work.  

Secret
to
Avoiding
Waste:
An
Accurate
Inventory
of
Services 

Rapidly
changing
times
make
for
a
rapidly
changing
corporate
IT
environment.
It’s
critical
to
ensure
you
know
what
IT
assets
you
have
now,
understand
how
efficiently
they’re
being
used,
and
then
charge
back
those
costs
to
the
departments
using
the
most
resources.  

Cloud
cost
management
is
top
of
mind
today
because
companies
are
wasting
as
much
as
30%
of
their
cloud
resources
and
overspending
in
the
cloud
by
as
much
as
50%—even
70%,
according
to
Gartner.
And
it’s
not
just
the
cloud
creating
IT
waste.
Mergers,
divestitures,
corporate
rightsizing,
a
return
to
travel
and
hybrid
work
environments
are
all
contributing
factors
to
misalignment
between
IT
resources
and
business
needs.
Any
time
the
company
evolves,
IT
services
need
to
come
into
alignment,
and
when
assets
aren’t
right-sized
waste,
inefficiencies,
and
overpayments
are
the
result. 

To
get
rid
of
IT
waste,
you
must
first
identify
it.
Knowing
what
you
have,
where
you
are
paying
too
much,
and
where
assets
are
going
unused
requires
gleaning
intelligence
from
an
accurate
inventory
of
all
mobile,
cloud,
and
network
services.
Visibility
is
only
as
good
as
your
system
for
tracking
and
categorizing
costs.
A
disciplined
inventory
and
vendor
management
program
establishes
a
corporate
catalog
of
providers
and
uses
automation
to
collect
granular
account
information,
invoices,
and
service
data.
Insights
can
shed
light
on
current
trends
in
usage
and
efficiency
as
well
as
serve
as
a
launchpad
for
cost
control,
policy
decision-making,
and
security
risk
reductions.  

Migration
Mismanagement
Slows
Technology
ROI 

Change
is
the
new
normal.
Whether
it
involves
moving
services
to
the
cloud,
shifting
employees
to
more
secure
corporate-owned
mobile
devices,
or
transitioning
services
to
optimize
and
modernize
a
network,
the
management
and
administration
of
technology
migrations
is
everything.  

At
Tangoe,
we
see
the
ROI
on
digital
transformation
initiatives
decline
(and
even
turn
negative)
because
companies
underestimate
the
time
and
resources
needed
to
carry
out
change.
Designing,
managing,
and
monitoring
transitions
becomes
a
full-time
job
that
can
distract
internal
teams
from
more
meaningful
work.
In
the
end,
it’s
more
efficient
and
less
expensive
to
augment
those
internal
teams
with
outside
resources
or
outsource
enterprise-wide
deployments
together.
Mismanaged
technology
migrations
can
significantly
hinder
a
company’s
digital
innovation
strategy. 

Careful
consideration
is
needed
when
it
comes
to
deciding
how
corporate
resources
are
allocated.
We
see
network
service
transitions,
SD-WAN
implementations,
as
well
as
migrations
to
cloud-unified
communications
as
areas
that
benefit
from
staff
augmentation.
While
we
all
know
outsourcing
can
help
curb
costs,
this
is
where
we
see
consultancies
payout
in
significant
ways.  

Insider
Knowledge
Provides
a
Level
of
Confidence
That
Is
Priceless 

A
highly
dynamic
mobile,
cloud,
and
network
environment
highlights
the
importance
of
obtaining
insider
intelligence.
When
corporate
service
transformation
is
on
the
line,
IT
spending
decisions
shouldn’t
be
made
in
a
vacuum.
IT
budgeting
decisions
are
far
easier
when
consulting
an
authority
on
the
latest
pricing
benchmarks
for
services
or
tips
for
negotiating
telecom
contracts
in
your
favor.
They
evaluate
how
millions
of
dollars
are
spent
(and
misspent)
every
year,
and
they
bring
with
them
valuable
insights
into
tech
spending
trends
that
can
help
you
compare
your
corporate
strategies
against
hundreds
of
other
companies.
Consultants
are
versed
in
helping
tackle
the
big
stuff: 

• Fiduciary
  responsibility
  when
  IT
  budgets
  and
  spending
  are
  rising
  despite
  slow
  economic
  growth 
• Reigning
  in
  cloud
  sprawl
  and
  cloud
  costs
  all
  while
  strengthening
  cloud
  security  
• Establishing
  governance
  after
  innovation
  has
  run
  amok  

After
all,
it’s
the
insider
intelligence
that
helps
CIOs
and
CTOs
sleep
at
night.
That
confidence
is
worth
its
weight
in
gold. 

To
learn
more
about
IT
expense
and
asset
management
services,
visit
us

here.   

About Author

AndyC

Andy Curtis is an award-winning security consultant, researcher and public speaker. He has been working in the computer security industry since the early 1990s, having been employed by state and federal government, leading healthcare and banking providers across three continents. He has given talks about computer security for some of the world’s largest companies, worked with law enforcement agencies on investigations into hacking groups, and is a regular voice on TV and radio explaining IT security threats.

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