As a CFO or CTO, you’re no stranger to the constant pressure to reduce costs and optimize your organization’s technology spending. 

In the face of inflation and the threat of recession, it can be tempting to make hasty decisions that may seem like a quick fix but could ultimately harm your business in the long run. 

However, with the right approach, you can deal with this challenge and implement technology cost optimization strategies that deliver immediate impact without compromising your organization’s long-term health and competitiveness. 

According to a recent report by AICPA, CFO spending on technology increased by 3.8% QoQ in the second quarter of 2024. This is the highest jump in over two years. 

The problem is clear: 39% of CFOs polled said they would turn to cost-cutting measures in the fourth quarter if high inflation persisted.  

The pressure is on, and you need a solution that addresses the urgency of the situation while also protecting your organization’s future. 

The solution lies in a structured, programmatic approach to tech cost management that follows a set of well-defined rules. 

By targeting the right areas, reducing costs rather than simply freezing them, and focusing on cash-based savings, you can achieve the rapid cost reductions your organization needs without jeopardizing your ability to ramp up and deliver on key initiatives when conditions improve. 

Let’s dive right into the strategies that’ll help you optimize technology costs! 

1. Conduct a technology asset audit

Conducting a thorough technology asset audit is the first step in optimizing your technology costs. This involves identifying all the hardware, software, and cloud-based services used across your organization, their usage, and associated costs. 

By gaining complete visibility into your existing technology assets, you can identify redundant or underutilized assets that can be consolidated or eliminated, reducing unnecessary expenses and streamlining your technology stack. 

2. Implement centralized technology management

Establishing a centralized technology management system is crucial for maintaining control over your technology ecosystem. 

This system should oversee all technology purchases, renewals, and cancellations, ensuring compliance with purchasing policies and negotiating better deals with vendors. 

By centralizing your technology management, you can avoid the chaos and inefficiencies that often accompany decentralized decision-making. 

For your SaaS stack, you can use SaaS management platforms like Wyzard. Wyzard centralizes the renewal, billing, and contract data of every software you use. This ensures that you have complete visibility of where you are spending and how much. 

3. Consolidate duplicate or overlapping tools

Your marketing and tech teams do not necessarily need different communication platforms. Having different platforms for your teams for the same purpose only splits your buying power, which reduces the scope for negotiation. 

Analyzing your technology inventory can help you identify duplicate or overlapping tools that serve the same purpose. 

Consolidating these applications can eliminate redundant costs and streamline your technology stack. This approach not only reduces costs but also simplifies your technology infrastructure, making it easier to manage and maintain. 

4. Optimize license utilization 

Reviewing your technology license utilization is essential for identifying unused or underutilized licenses. Adjusting the number of licenses to match your actual usage and canceling unused subscriptions can significantly reduce costs. 

Let’s say, you have a HubSpot Marketing Hub Professional plan. You used to need more than 5 seats, but because you’ve downsized your team, you only need 3 seats now. You could save almost $100 per month by reducing the number of licenses. 

By optimizing your license utilization, you can ensure that you’re only paying for what you need without sacrificing the functionality and capabilities your organization requires. 

With Wyzard, you can keep a track the usage your SaaS stack to determine if you need the number of seat or not.

5. Leverage bulk-purchasing discounts 

Once you’ve centralized your tech stack data and consolidated your overlapping tools, you have a better picture of your purchasing power. 

Negotiating with technology vendors to take advantage of bulk purchasing discounts can result in significant cost savings. 

This approach is particularly effective for frequently used applications or hardware, where the volume of purchases can lead to substantial discounts. So instead of different teams buying technology assets separately, you can centralize the requirement and purchase it together to get more discount. 

By leveraging bulk-purchasing discounts, you can reduce your technology expenses without compromising the quality or functionality of your technology assets. 

6. Renegotiate existing contracts

Regularly reviewing your technology contracts and renegotiating terms with vendors can help you secure better pricing, additional features, or more favorable terms. 

Using benchmarking data to leverage your position during negotiations can ensure that you’re getting the best possible deal. 

Wyzard offers negotiation advisory to help you procure tools at the best possible price. It uses your spend data, utilization data, and industry benchmarks, to get the best deals for you. By renegotiating your contracts, Wyzard reduces your technology expenses and improves your overall technology value proposition. 

7. Automate technology spend tracking 

Implementing tools or platforms that can automatically track and monitor your technology spending, usage, and renewal dates can help you identify cost-saving opportunities and streamline your technology management processes. 

By automating your technology spend tracking, you can ensure that your technology expenses are aligned with your organization’s strategic goals and priorities while also reducing the administrative burden associated with manual tracking and reporting. 

This is exactly what Wyzard’s SaaS Spend Management platform does for you. It integrates with every software your organization uses and automatically fetches the details. By tracking you spend, it also gives you alerts if you go over the budget your organization has set, which is an excellent way to ensure you don’t spend too much on something that you’ll probably never use. 

8. Implement agile sourcing 

Agile sourcing is a progressive approach to IT procurement that breaks down the process into shorter, iterative chunks to mitigate cost overruns, delays, and misaligned outcomes. 

This approach involves engaging finance and procurement stakeholders earlier to streamline the decision-making process and cross-pollinate ideas to make the technology selection process more efficient. 

By adopting agile sourcing, IT leaders can reduce costs and improve the overall efficiency of their IT operations. 

This approach also helps in reducing the complexity of the procurement process, which can lead to significant cost savings. 

For example, by breaking down the procurement process into smaller, manageable chunks, IT leaders can avoid the need for lengthy and costly RFPs. 

Additionally, agile sourcing allows you to respond quickly to changing business needs, which can help reduce the risk of overspending on technology. 

9. Wring more value from existing technology 

Wringing more value from existing technology involves continually pursuing more value out of the spend already made. Here you make internal customers justify why existing IT spend on solutions won’t meet their business needs and continually educate employees about the tools available to them. 

By leveraging existing technology more effectively, you can reduce costs and improve the overall efficiency of your IT operations. This approach also helps in reducing the need for new technology investments, which can help in reducing the risk of overspending on technology. 

For example, by leveraging existing technology more effectively, you can avoid the need for costly upgrades or replacements. 

Additionally, wringing more value from existing technology can help in improving the overall user experience, as employees are more likely to be familiar with the tools and technologies they are using. 

10. Automate IT 

Automating IT involves finding ways to implement IT process automation to reduce labor costs and improve efficiency. Commonly automated tasks include system monitoring, patch management, and backups. 

By automating IT processes, you can reduce your technology costs and the risk of human error, as automated processes are less likely to be affected by human mistakes. 

For example, by automating system monitoring, you can ensure that systems are always up and running, which can help in reducing the risk of downtime and data loss. 

Additionally, automating IT processes can help improve the overall security posture of the organization, as automated processes are less likely to be affected by security threats. 

11. Implement a technology asset management strategy 

When you implement a technology asset management strategy, you develop a comprehensive plan to manage and optimize technology assets across the organization. This helps you identify areas where costs can be reduced and improve the overall efficiency of their IT operations. 

By implementing a technology asset management strategy, you can ensure that your technology investments align with the company’s strategic goals and priorities. This approach also helps in reducing the complexity of the IT stack, which can lead to significant cost savings. 

It helps you avoid the need for multiple licenses, maintenance contracts, and support services. And also helps in improving the overall security and compliance posture of the organization, as you can focus on a smaller set of technology stack that are more secure and compliant. 

12. Continuously monitor and optimize 

You cannot optimize what you don’t measure. It’s essential to establish a robust process to track and analyze your technology expenses consistently. Without clear visibility into your spending patterns, identifying areas for potential optimization becomes an uphill battle. 

Continuous monitoring not only allows you to pinpoint inefficiencies, it also allows you to make informed decisions about your technology investments. 

As your business grows and scales, your technology requirements will inevitably grow. In such scenarios, an increase in tech spending might be justifiable to support your expanding operations. However, without continuous monitoring, you risk overlooking unnecessary expenses or failing to optimize costs quickly. 

By continuously monitoring your technology costs, you can proactively ensure that you don’t realize months later that you’ve been overspending on a particular aspect of your technology stack. Timely interventions and adjustments can lead to significant cost savings and prevent wasteful spending. 

Effortless technology cost optimization with Wyzard 

You must follow a proactive approach to optimize your tech cost. With Wyzard, you can easily keep a close watch on your tech spend and identify areas where cost-cutting can be achieved without compromising your business operations. 

Wyzard’s advanced analytics and AI-based recommendations allow you to make informed decisions about your technology investments. By continuously monitoring your spending patterns and identifying inefficiencies, Wyzard allows you to take proactive measures and optimize your costs with confidence. 

Moreover, Wyzard’s budgeting and forecasting module helps you align your technology spending with your business objectives, ensuring that you get value for every dollar you pay. With its insights, you can confidently switch to more efficient tools at better prices, which increases the return on your technology investments. 

Wyzard’s user-friendly interface and intuitive features make it easy to track and manage your technology costs, freeing up valuable time and resources that can be reallocated to core business activities. 

Take control of your technology spending with Wyzard. Book a demo today!