Cost optimisation is not cost cutting.
That distinction matters – especially now.
For most organisations, technology is the largest cost after people. In many cases, it is the largest – but leaders don’t realise it because technology spend is fragmented across departments, budgets, suppliers and contracts. Licences sit in one place, cloud in another, delivery teams somewhere else entirely. Until it is brought together, it is impossible to manage properly.
As technology leaders, this is a responsibility we see again and again.
Every modern organisation runs on technology and data. It underpins the entire value chain – from finding and onboarding customers, to delivering products and services, to billing, cash collection and reporting. IT is no longer a back-office function. It is the bloodstream of the business.
And yet, while technology innovation accelerates, cost creeps up quietly.
We have moved from sweating assets to cloud and SaaS. Large capital investments became predictable operating expenditure. That shift brought flexibility and speed – but it also removed natural cost friction. SaaS prices rise year on year. Vendors ship more functionality than teams can absorb. Organisations pay more while using less.
Layer on flat revenue, slow economic growth and rising costs elsewhere, and technology spend quickly becomes a board-level concern.
Cost optimisation is about value
Cost optimisation should not be a one-off exercise. It works best as an ongoing programme and, more importantly, a culture.
The strongest organisations treat cost awareness as part of how they run technology day to day – understanding what matters to the business, what is essential, and what is simply nice to have. That transparency builds trust with executives and boards, and it demonstrates mature leadership and control.
Of course, there are moments when cost control becomes urgent. Following M&A, organisations often need to work through duplication and stranded costs. During tougher commercial periods, sharper controls may be essential to protect margin and resilience. These moments matter – but they are far easier to navigate when cost optimisation is already embedded, not introduced in crisis mode.
Controlling technology cost is not about cutting for the sake of it. It is about ensuring spend is deliberate, prioritised and tied to outcomes.
The questions that matter are simple:
Is technology clearly driving revenue growth?
Is it improving margin?
Is resilience, cyber security and risk reduction designed in – or bolted on later at higher cost?
If the answer isn’t clear, the spend isn’t working hard enough.
Well-run technology functions tend to be simpler, not more complex. Complexity drives cost, slows delivery and increases risk. Being conscious of spend is not a weakness – even when budgets are healthy. Most organisations don’t have that luxury.
The leadership work that makes optimisation stick
Cost optimisation starts with leadership discipline, not tools.
There are a set of questions I return to again and again:
Do you know exactly where technology spend goes – ranked from largest to smallest?
Are you paying for tools that are barely used – just like unused gym memberships?
Is the operating model right – the right people doing the right work in the right locations?
Are SaaS and cloud environments actively governed – licences, users, infrastructure and access?
Is there a real simplification and consolidation plan, not just good intentions?
Are vendor relationships actively managed and renegotiated with leverage?
Is technology direction aligned to business strategy – or drifting expensively?
And one that is often underestimated:
How strong is your relationship with Finance?
Finance is not the enemy. They help you prioritise. Not all spend has equal value, and understanding that is a leadership capability, not a compliance exercise.
Where it always starts
For us, cost optimisation always begins with two fundamentals:
Do you genuinely understand the business strategy – and who validates it?
Do you know where the money is going – in order of impact?
Without those answers, cost initiatives become reactive, blunt and short-lived.
Cost optimisation is not about managing a budget. It is about owning value.
That mindset – more than any framework, tool or procurement exercise – is what separates good technology leadership from great leadership.
