Four Steps to Cost Savings

“Consume Less”

(Gartner Group)

While that is a good piece of advice, it is not exactly actionable. Gartner puts out a lot of good research – and their piece on 8 actions CIOs must take during COVID-19 for financial survival is not an exception. However, we think we can contribute by making it a little less abstract.

We suggest four simple steps to consume less in a way where you will immediately see an impact on your spend.

How to "Consume Less"

Having spent too many years to count helping companies “Consume less”, here are our pocket aces, things you can start doing right now:

  • Start with things that will save you money right now. There are plenty of longer-term (12-18 month timeframe) optimizations, but for cash flow, you need something that puts a dent in spending today. For most companies, that would be cloud spend – your Azure, AWS, Office 365, Salesforce, Workday, etc. spend.
  • Start with the big things. Pick the ones where saving 20% would be “real money”. Yes, there’s money in the long tail, but that’s for next week. You do this by listing itemized spend per service, and sort by cost, descending. This will be a Pareto (80/20) rule optimization.
  • Identify the department or person responsible for that spending. This is harder the larger your organization is, but it is critical.
  • Ask three questions to that person or department:
    1. Is this service/software still needed
    2. Does it need to be as large a server/drive/feature bundle as it is
    3. Does it need to run all the time

Steps 3 and 4 have saved just about every company 10-15%. Most of the time by simply looking at the 20 largest spend units for each service.

If you want to se an illustration of what we mean, we have dived a bit deeper into savings on Azure in the latest edition of Kostner Quarterly Insights. This shows that in average companies can save 20.3% on their monthly Azure-bill. Starting right now. If you want to read more about this, download Kostner Quarterly Insights.

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