Challenges in the current economic environment, such as inflation, rising interest rates and skill shortages, are forcing organizations to reduce and optimize their IT costs. However, research shows that overall Enterprise IT spend is still expected to further grow in 2023, driven by digital ambition. The demand for new solutions and systems continues to grow as more and more organizations begin to digitalize. As a Chief Information Officer (CIO), it can be difficult to balance the pressure on IT costs and while also safeguarding value and investments in future projects.

Sustainable IT cost management and optimization are therefore crucial and aim to improve efficiency and reduce expenses, while ensuring continuity, performance, and value realization. Systematically cutting the overall IT budget may appear like an attractive solution, however it is insufficient for organizations that want to future-proof themselves and operate at market-speed. An optimization approach serves as a more sustainable and effective long-term strategy.

In this paper, KPMG provides insights into how organizations can achieve sustainable IT cost optimization, by obtaining and maintaining transparency on IT cost components and addressing key IT cost optimization levers in a systematic and iterative way, enabling self-funding initiatives and dynamic investment.