Each budget cycle, CIOs are expected to reduce operating expenses even when faced with increased expenditures on key business projects or the need to increase service levels. They are often challenged with achieving these expense reductions without regard for increased business volumes. They respond with budget presentations positioning these cost drivers and offsetting expense management initiatives designed to improve asset utilization and productivity, including strategies to reduce the growth of hardware and software maintenance.
Longer-term strategies include application rationalization and infrastructure consolidation accompanied by material capital investments. These longer-term strategies require significant investment of time and resources and should be an integral part of your overall expense management plan, however, IT leaders and sourcing teams should also consider these short-term actions to produce some meaningful in-year reductions to help achieve your annual budgetary objectives.