Reinvest in Growth With Smarter IT Spending

Take a more strategic, programmatic approach to IT cost optimization

Cost optimization goes beyond cost cutting

To maximize cost savings, IT leaders should pursue cost optimization through both function-specific and enterprisewide programs. Cost optimization is a business-focused, continuous discipline intended to maximize business value while reducing costs.

We’ve compiled smarter IT spending best practices into a customizable roadmap to help you plan and execute an effective cost optimization initiative.

Download the roadmap for strategic cost optimization

Successfully execute your cost optimization initiatives.

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    How Gartner helps you achieve strategic cost optimization

    Tools

    • Tools to execute your cost management strategy
    • Unbiased advice to rightsize external technology spend through the entire buying cycle
    • Insights on technology spend management, contract practices and long-term risk mitigation

    Research

    • Assess the impact of your cost plans across key decision factors/criteria
    • Evaluate the trade-offs between the benefits, costs, risks and viability of different cost control initiatives

    Experts

    • 2,250 + research and advisory experts who challenge conventional wisdom on cost and growth
    • Wide coverage of the top challenges, trends and priorities across industries and geographies

    Community 

    • Real-world advice from peers in live cohorts and virtual discussion boards
    • Strategic guidance on the trends shaping your function, company performance and personal leadership

    Achieve Your Cost Management Priorities

    Cost optimization questions Gartner can help answer

    Cost optimization and reducing cost are two different approaches to cost management. While a better approach is to move from a mindset of cost cutting to one of cost optimization, there are a few key differences between the two:

    Implementing budget cuts  

    Cost cutting leads enterprises to reduce cost from every part of business (e.g., all budgets will be cut by 15%), often creating a disproportionate impact on capital spending compared to operating spend. Cost optimization focuses on identifying parts of the enterprise that should be cut dramatically and investing in parts that will provide the greatest near-term positive impact (e.g., digital investments).

    Creating business value

    For cost reduction, the objective is to simply implement budget cuts, generally activities that are easier to defer or cut. This approach does not create business value and results in the enterprise being hampered. Cost optimization focuses on key business processes and capabilities to identify opportunities for cost optimization. Enterprises can often achieve more lasting improvements in cost efficiency (and value) when they “optimize” by business process.

    Organizations often cut costs only in times of emergencies and without a clear plan or framework. Worse, leaders optimize costs in silos, isolating adjacent stakeholders who have their own, equally significant objectives.

    Cost optimization helps leaders uphold larger business goals by combining practices and experiences of all business units. It lets you prioritize cost optimization opportunities by value, not just the potential to reduce spending.

    When faced with challenges, CIOs need to determine how to approach cost cutting in the least damaging way to the medium- and long-term health of the business.

    While Gartner recommends a structured and programmatic approach to cost management, business and market pressure often dictate the pace to be rapid or immediate, more of a “cost-cutting” way.

    CIOs facing immediate or short-term pressures still need to take a thoughtful approach to cutting costs, ensuring that they strive to mitigate the risks and minimize the longer-term impact on the organization.

    Other priorities Gartner can help with

    Accelerate Your Digital Transformation Journey
    Master Today’s Technology Trends
    Communicate IT’s Business Value

    Gartner is a trusted advisor and an objective resource for more than 14,000 enterprises in 100+ countries.

    Learn more about how we can help you achieve your most critical priorities.