Is being stingy cool? Seven IT cost-cutting measures put to the test

IT budgets remain under pressure, and cost-cutting continues to dominate many meetings. But those who focus solely on driving down prices will soon find themselves cutting corners in the wrong places. IT specialist Avision has put seven key areas under the microscope and highlights where cost-cutting in IT actually makes a difference.

IT costs are rarely caused solely by excessive prices. Complexity, duplicate structures and short-term cost-cutting reflexes, on the other hand, can place a greater long-term strain on budgets than a higher licence price alone. Anyone wishing to make sustainable savings must therefore start with their own organisation, for example in terms of architecture, governance and organisation. Avision’s reality check shows which areas of adjustment really make sense and where companies should avoid making hasty cuts:

 

1. Reduce technological complexity

The idea: The leaner and more efficient the IT landscape, the lower the costs.

The practical test: Many IT budgets suffer less from high licence prices than from accumulated complexity: too many programming languages, frameworks, versions and parallel technologies. Every additional element increases maintenance effort, update cycles, security risks and the need for specialist knowledge. Not every new ‘hype’ framework is therefore an investment in the future; rather, the level of maturity determines maintainability, availability of skilled personnel and stability.

Savings potential: High. Technological sprawl drives up operating costs over the years. Clear architectural principles and consistent standardisation are two of the most effective levers for sustainable cost reduction.

 

2. Switch to cheaper solutions

The idea: Cheaper software reduces IT costs both immediately and in the long term.

The practical test: The licence price is only part of the equation. Migration, training, integration and productivity losses can quickly outweigh the savings. Furthermore, new operating and support costs arise. A switch is therefore only worthwhile if the Total Cost of Ownership (TCO) falls, not just the purchase price.

Savings potential: Low. Without a TCO analysis, simply driving down prices usually leads to a shift in costs rather than genuine savings. Low purchase prices may seem attractive at first glance, but can prove costly in the long run.

 

3. Using AI

The idea: The use of artificial intelligence reduces personnel and process costs.

Practical test: AI can automate manual tasks, shorten processing times and relieve the burden on skilled staff. This applies particularly to repetitive processes, large volumes of data or costly quality assurance. At the same time, implementation, integration, data preparation and governance themselves incur significant costs. Without a clear business case, AI quickly becomes a cost driver rather than a lever for efficiency.

Savings potential: Moderate. Highly effective for clearly defined use cases, but low where there is a rush to adopt it or when AI becomes an end in itself. The decisive factor is the concrete benefit, not the technology itself.

 

4. Question your hosting strategy

The idea: A change reduces infrastructure and operating costs.

Practical test: No operating model is inherently cheaper. The cloud can save costs with flexible workloads, but quickly becomes expensive with continuous operation or a lack of cost control. Conversely, on-premise solutions also incur high fixed costs if utilisation and operations are not aligned. The decisive factors are workload profile, security requirements and internal expertise.

Savings potential: Medium. Attractive depending on the use case, but only if decisions are data-driven.

 

5. Consolidate applications

The idea: Avoid parallel systems to save costs.

Practical test: Many companies use multiple applications with similar functions. Consolidation can reduce expenditure and cut down on the number of interfaces. However, it requires organisational decisions and may increase the workload in the short term.

Cost-saving potential: High. Strategically sound if processes and governance are adapted. Even considering the short-term effort, long-term savings are on the horizon.

 

6. Differentiate service levels

Assumption: Does every application really need a ‘gold’ SLA?

Practical test: Not every solution is business-critical. Differentiated service levels save costs without jeopardising business continuity.

Savings potential: High. Often overlooked, but an effective lever for cost optimisation.

 

7. Streamlining the organisation

Assumption: Costs arise primarily from bureaucracy.

Practical test: Cumbersome decision-making processes, silos and lengthy coordination cause considerable overhead. An efficient organisation and DevOps models can make IT faster and more cost-effective.

Savings potential: High. Probably the biggest lever, but also the most difficult, as it requires structural changes.

 

“IT costs cannot be reduced through short-term cost-cutting programmes, but through decisions that are sustainable in the long term,” says Nadine Riederer, Managing Director of Avision. “In this regard, efficient architectures and reduced complexity are more effective than penny-pinching in procurement or excessive cost-cutting measures in projects. Speaking of savings: do you regularly review your licences? In many companies, unused or duplicate licences run undetected for years. Licence reviews are real low-hanging fruit with low risk and quick results.”