Cost out catalogue

Creating a cost out catalogue for a financial sector client to achieve savings within IT

Spektra Analytics undertook a cost out project for a client in the financial sector. The client faced the imperative of reducing IT expenses while maintaining operational efficiency. Spektra Analytics was tasked with performing a comprehensive cost out analysis within the client's IT department, ultimately delivering substantial savings.

The client was looking to reduce costs within IT and had established several focus areas. The client was looking for potential areas for cost reduction. and was willing to look at both internal and external cost drivers. To reduce the load on the clients resources, Spektra Analytics would create a catalogue of hypotheses that the client could select for deep-dives. All of this resulted in a roadmap for implementation of selected areas.

Keeping IT costs under control is vital for clients in the financial sector

The client, a large scale financial sector enterprise, faced a cost out exercise to reduce overall spend without impacting ongoing operations. The client operates in a highly competitive environment, and maintaining cost efficiency is paramount. By reducing IT costs, the client could allocate resources more effectively.

For clients in the financial sector, reducing IT costs is important due to several compelling reasons. Lowering IT costs while preserving operational capabilities directly impacts profitability and costs saved can be reinvested in revenue-generating activities, such as redirecting costs to developers. The client wished to ensure their long-term sustainability by allocating savings towards investments in digital transformation, cybersecurity, and other critical areas.

Our approach and solution

1. Data collection and baseline: Spektra Analytics began by conducting a holistic assessment of the client's IT costs. This included a deep dive into software licensing, usage of infrastructure and overlapping functionality. The data collection entailed contract data and contract overviews already created by the client including a full spend cube. This allowed Spektra Analytics to create hypotheses based on total spend and prioritize.

2. Creating hypotheses: The purpose of this phase was to create hypotheses that covered both external and internal saving areas. Spektra Analytics leveraged our extensive experience to create hypotheses for savings potential. By using the spend cube analysis it was possible to summarize the hypotheses for the different areas. The clients stakeholders were consulted to ensure the validity of the savings potential. Based on the hypotheses, the client and Spektra Analytics selected areas for deep dives.

3. Create savings catalogue: Spektra Analytics performed deep dives on the hypotheses generated in the previous phase and selected by the client. The deep dives created an actionable savings catalogue with realistic estimations of the potential savings and the levers to be used to achieve the savings.

4. Roadmap for implementation: Spektra Analytics created a roadmap for the client to implement the savings catalogue to achieve the committed saving targets.

20+ mDKK per year in savings catalogue

The cost out catalogue resulted in possible savings in excess of 20 mDKK per year

Results and benefits

1. Significant Cost Reduction: Spektra Analytics successfully helped the financial sector client realize substantial cost reductions within their IT budget, ensuring that resources were used more efficiently.

2. Right-sizing Infrastructure: Through meticulous analysis of the client's infrastructure, Spektra Analytics identified underutilized resources and recommended rightsizing efforts. This led to the decommissioning of redundant servers and the optimization of data storage, resulting in immediate cost savings.

3. Sustainable Savings: Spektra Analytics implemented sustainable cost-saving measures that would continue to benefit the client in the long term, ensuring ongoing financial resilience.