Cost-Cutting Solutions for CIOs in Industrial Manufacturing
Transforming IT Strategy in a Budget-Constrained World
In today’s economic climate, CIOs in industrial manufacturing face mounting pressure to deliver enhanced services while reducing operational costs. KPMG offers strategic cost-cutting solutions to help CIOs optimize IT budgets and drive digital transformation.
Key Challenges Facing CIOs
- Operational Complexity: Incomplete integrations and delayed maintenance increase facility costs.
- Tech Debt: Headcount freezes and limited capital hinder progress.
- Cash Management: Demonstrable cost reductions are required before new investments are approved.
Strategic Cost Reduction Focus Areas
1
Infrastructure & Hardware Optimization
- Identify and eliminate underutilized hardware
- Optimize network and telecom usage
- Consolidate procurement categories
2
Cloud Cost Optimization
- Enhance IaaS/PaaS efficiency
- Streamline SaaS licensing
- Improve cloud FinOps capabilities
3
Software & Application Optimization
- Rationalize applications
- Reclaim and reuse software
- Explore alternatives to VMWare
4
Network Optimization
- Automate operations
- Optimize traffic loads
- Right-size bandwidth
5
Contract Optimization
- Improve SLAs and maintenance terms
- Shift to third-party maintenance
- Modify contracts for better financial terms
6
Modern Delivery
- Adopt Agile/Lean methodologies
- Reduce organizational complexity
- Redefine service differentiation
7
GenAI-Driven Legacy System Conversion
- Redesign solution sets
- Shift to product-centric models
- Evaluate governance structures
8
Labor & Outsourcing
- Consolidate locations
- Enhance productivity
- Transform performance management
Potential Savings by Focus Area
Focus Area | Estimated IT Budget Savings |
Infrastructure Optimization | 5–15% |
Cloud Optimization | 2–25% |
Software Optimization | 2–25% |
Network Optimization | 15–20% |
Contract Optimization | 2–25% |
| GenAI Legacy Conversion | 15-20% |
| Modern Delivery | 2–4% |
| Labor & Outsourcing | 15–20% |
Implementation Timeline
- Short-Term (3–6 months): Infrastructure, software, and cloud optimization
- Medium-Term (4–8 months): Contract optimization and modern delivery
- Long-Term (6–12 months): Continuous improvement in IT models and outsourcing
Success Stories
- Platform Modernization: Migrated 1,000 apps from Unix to Linux, saving $250M annually
- Hardware Optimization: Improved storage efficiency, saving $38.81M in Year 1
- IT Asset Optimization: Rationalized assets, saving $10M annually
- Labor Globalization: Developed global strategy, saving $20M over four years
Meet our team
Martin Kaestner
Principal, US Analytics and AI Lead, KPMG in the US
Martin Kaestner
Principal, US Analytics and AI Lead, KPMG in the US