Multi-Year Global IT TCO Optimisation Program
Delivering a material year-on-year IT cost reduction over a three-year period, while maintaining service stability and enabling sustainable cost discipline beyond the life of the program.
Client Overview
Challenge
Our Role & Approach
Overall Savings Outcome
Program Objectives
Governance Model
Execution Phases and Savings Profile
Phase 1 - Foundation and Early Wins (Year 1)
Phase 2 - Broad-Based Execution (Year 2)
Phase 2 - Broad-Based Execution (Year 2)
Operational Highlights Across Towers
Capability & Sustainability Outcomes
Conclusion
A global enterprise initiated a multi-year Total Cost of Ownership (TCO) optimisation program to address sustained growth in IT operating costs across a complex, globally distributed technology environment. The program had Board-level visibility and executive sponsorship and was designed as a cross-functional initiative spanning the entire IT estate.
The primary objective was to deliver material, year-on-year IT cost reduction over a three-year period, while maintaining service stability and enabling sustainable cost discipline beyond the life of the program.
Over time, IT costs had increased due to a combination of legacy technologies, decentralised purchasing, fragmented vendor contracts, and inconsistent commercial governance. Business units operated with significant autonomy, resulting in overlapping applications, duplicated tools, and limited transparency of true end-to-end IT costs. External cost pressures further compounded the issue.
The organisation required a structured, data-driven approach to reduce total IT cost ownership — not through short-term cuts, but through sustainable optimisation across technology, contracts, and operating processes.
We were engaged as a strategic partner to design and support execution of the TCO optimisation program. Working closely with the CIO and IT business unit leaders, we helped establish a structured cost optimisation framework with strong governance, clear targets, and disciplined execution.
A cross-functional global TCO team, comprising IT and Procurement stakeholders and supported by Finance and Legal, was formed to manage, drive, and monitor initiatives. This team worked alongside the client’s existing PMO and delivery structures rather than operating as a standalone PMO.
The approach deliberately combined:
Early tactical savings to build momentum, and
Larger structural and contractual changes to ensure savings increased year-on-year and were sustainable.
Across the three-year program, total identified savings were in the tens of millions of euros. Savings accelerated each year as initiatives progressed from quick wins to enterprise-wide optimisation:
Year 1: ~20–25% of total program savings
Year 2: ~30–35% of total program savings
Year 3: ~40–50% of total program savings
Savings were delivered across all major IT towers, demonstrating that value was achieved through portfolio-wide optimisation rather than reliance on any single initiative or category.
The program was designed around four core objectives:
Reduce Total IT Cost Base
Deliver cumulative IT cost savings in the tens of millions of euros over three years, with increasing annual contribution and a meaningful proportion embedded into the ongoing IT run-rate.
Improve Cost Transparency
Establish consistent visibility of IT spend across services, vendors, and business units using a structured TCO model and benefits tracking approach.
Optimise Commercial and Contractual Structures
Consolidate fragmented contracts, renegotiate key agreements, and introduce stronger commercial governance across IT spend categories.
Embed Sustainable Cost Discipline
Ensure cost optimisation became part of normal IT and procurement operations rather than a one-off exercise.
Executive Steering Committee
An Executive Steering Committee, led by the CIO and senior IT business leaders, provided oversight and strategic direction. The committee met quarterly and on an ad-hoc basis when required to review progress, resolve escalations, and approve major decisions.
While the program had Board-level visibility, execution authority sat firmly with the executive leadership team, enabling timely decision-making and accountability.
Global TCO Team
Day-to-day execution was managed by a cross-functional Global TCO Team, consisting of IT and Procurement stakeholders supported by Finance and Legal. The team coordinated initiatives, tracked benefits, maintained the integrated TCO model, and ensured consistent savings validation.
Importantly, this team worked in close alignment with the client’s existing PMO, integrating cost initiatives into broader delivery governance rather than duplicating structures.
Category / Tower Working Groups
Cost optimisation activity was organised by IT towers, aligned to the organisation’s existing Centers of Excellence (CoEs):
Infrastructure & Cloud
Networks & Connectivity
End-User Computing
Applications
Security
Service Management
ERP & Core Platforms
Each working group was jointly led by IT and commercial stakeholders and was accountable for identifying, delivering, and sustaining savings within its domain.
Focus
Year 1 focused on establishing transparency, governance, and early momentum. Activities included building the IT cost baseline, prioritising opportunities, and launching early commercial and licensing optimisations.
Savings Contribution
Delivered approximately 20–25% of total program savings
Key Drivers (illustrative contribution to Year 1 savings)
· Software licence rationalisation and early renegotiations (~35%)
· Infrastructure and hosting rightsizing (~25%)
· End-user computing standardisation (~20%)
· Other tactical optimisations (~20%)
These early wins validated the program approach and built organisational confidence.
Focus
With governance embedded, year 2 concentrated on executing larger, cross-tower initiatives and structural changes.
Savings Contribution
Delivered approximately 30–35% of total program savings
Key Drivers (illustrative contribution to Year 2 savings)
Software agreement consolidation and renegotiation, including the global Microsoft Enterprise Agreement (~30%)
Network and connectivity optimisation (~25%)
Application rationalisation and decommissioning (~20%)
Infrastructure and cloud optimisation (~15%)
Service management and security tooling optimisation (~10%)
Savings increasingly shifted from tactical actions to structurally embedded improvements.
Focus
Year 3 represented the peak of savings delivery as multi-year initiatives completed and benefits fully materialised, while governance and discipline transitioned into business-as-usual.
Savings Contribution
Delivered approximately 40–50% of total program savings.
Key Drivers (illustrative contribution to Year 2 savings)
Completion of enterprise-wide software and licensing initiatives (~30%)
Network, telephony, and collaboration platform optimisation (~25%)
Application portfolio reduction and licence optimisation (~20%)
Infrastructure and cloud commercial optimisation (~15%)
Policy-driven demand and contract controls (~10%)
A meaningful proportion of these savings translated into permanent run-rate reductions, with the remainder comprising one-time benefits and cost avoidance.
Savings were achieved through coordinated action across the IT landscape:
Software & Licensing
Fragmented regional agreements were consolidated into global contracts, with the Microsoft Enterprise Agreement renegotiation standing out as a major value driver.
Networks & Connectivity
Network modernisation initiatives reduced unit costs while improving flexibility and performance.
Applications
Application rationalisation reduced portfolio size, lowering licence, support, and infrastructure costs.
Infrastructure & Cloud
Rightsizing, migration, and commercial optimisation reduced ongoing hosting and consumption costs.
End-User Computing
Standardisation and lifecycle optimisation reduced per-user costs without impacting productivity.
Process & Commercial Controls
Existing IT asset management processes were optimised to introduce stronger commercial and procurement rigor — ensuring hardware requests were assessed against inventory and redeployment opportunities before new purchases were approved.
Beyond financial savings, the program strengthened internal capability:
· Dedicated IT category roles were introduced to continue driving cost optimisation post-program.
· Commercial governance, contract scrutiny, and demand discipline were embedded into BAU processes.
· Cost optimisation forums transitioned into permanent structures aligned to IT CoEs.
This ensured the organisation retained both the capability and discipline to continue managing IT cost over time.
This program demonstrates how a disciplined, multi-year approach to IT TCO optimisation can deliver tens of millions of euros in value without compromising service quality. By combining strong governance, cross-functional execution, and a balanced portfolio of initiatives, the organisation achieved increasing savings year-on-year and embedded sustainable cost discipline.
For prospective clients, the key message is clear:
Meaningful IT cost reduction is achieved through structured, portfolio-wide optimization, not isolated cuts, and delivers the greatest value when treated as a transformation rather than a one-off exercise.