Last Updated on 12 May 2025 at 12:44

Increasing competition, sales decrease, industry disruptions, changing business priorities, and enterprise-wide cost reduction to liberate working capital have an impact on

IT cost reduction done efficiently

I consider that a massive IT costs reduction alone and its corollary, the massive workforce reduction is not a sustainable strategy in the long term.

At some point, and earlier than expected, this simplistic strategy will backfire. If done improperly, a quick and dirty approach to cost reduction will impact in a negative way all other operational aspects of the business. The loss of overall productivity, long-term expertise, and staff morale have a serious impact on future business development.

This is the main reason for which mature strategic planning should balance the need for temporary cost reduction and the preservation of business interests in the short and medium-term, with particular attention to the long-term.

The IT cost reduction framework

For some organizations, there is a reluctance in approaching IT cost reduction as a restructuring programme that is impacting

IT cost reduction strategies

Let’s see a little more in detail how 2 major views on the IT cost reduction can impact a business organization and how to optimize the outcome for the organization.

1 – IT as a cost centre

In this strategy scenario, IT is perceived as a cost centre because it doesn’t produce a clear business profit. Therefore, the most common strategy to reduce costs involves an aggressive approach to:

Other considerations and pitfalls

In my experience of over 25 years, I noticed that businesses are

A real-world example:

Instead of starting to

Finally, the business discovered new ways of achieving more, while the workforce has expanded rapidly thanks to new successful services they launched in the process.

Become IT risk tolerant

Rather than a traditional view of IT and

Encourage communication on IT-related issues

Sounds cliché, but a “right to the point” communication style should be encouraged across the entire business organization. This should be encouraged not only during a cost reduction programme but also as a new way of

Focus on building a culture of cost-reduction

This is something that is much harder to create, and even more difficult to define as a strategy per se. Financial discipline and

Conclusion

Not only the IT function, but all business functions are going through a major structural transformation. An important number of businesses became

Key points to remember

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  Explanatory footnote about this article

  This article is reflecting my hands-on practice when working on large-scale and complex cost-reduction programmes for large multinational businesses, as well when advising small business owners. This article has been prepared for informational purposes only, and shall not be considered as an offer or a personal recommendation.

  I am internationally certified in the management of complex programmes, associated risks, and portfolio management. In practice, I apply a unique methodology crafted to the particular situation of the company I temporarily assist.

  I am often asked to help businesses as a non-executive advisory director or taking an interim C-level, implementation role. I have good expertise in:

  • setting up the necessary structures for effective change management/business transformation,
  • implementing the right processes and governance structures,
  • improving the operational effectiveness,
  • or recovery of failed projects and programs.

  I deliver cost-reduction and business transformation programmes for various business structures, sizes, and diversified industries. You can find more about me here.

  Note: This article was first published on the Insights blog of the ConsultingTeam.Solutions website and presented as LinkedIn Expertise. The article is fully reproduced here as per the original form.

  • Contributeur

  Elena Debbaut

  Partenaire – Restructuration Opérationnelle

  

  https://elena.debbaut.solutions/

  ed@consultingteam.solutions

  Elena Debbaut is a strategic execution expert to boards and executive teams. She leads and advises on complex transformations when governance barriers, internal politics, or structural fragmentation prevent organizations from executing critical decisions.

  Specialities:

  • governance-constrained transformation
  • operational restructuring
  • strategic recovery & execution