The IT portfolio flywheel: Funding innovation through cost optimisation

For many organisations, IT investments have slowly transformed from enablers into obstacles. Applications multiply, technical debt accumulates, and costs spiral upward—all while business leaders expect both innovation and cost reduction.

What began as technology investments to solve business problems now frequently creates new ones. Your IT estate might have transformed into an expensive burden consuming budget that could (should) be driving innovation. The evidence is clear in unused licenses, fragmented systems, and the growing gap between what technology promises and what it delivers.

These contradictions are widely recognised. A recent SoftwareOne study¹ found that 92% of CIOs believe digital transformation will drive new revenue in the year ahead, but 72% say technical debt will adversely impact their transformation efforts.

More optimistically, the same research identified a select group of companies—'Optimised Innovators'—who excel at turning cost savings into a virtuous cycle of innovation, creating a self-sustaining flywheel of continuous improvement and indicating the rewards of turning IT assets into a business advantage rather than a costly overhead.

So, what can these trailblazers teach us—and how can you benefit?

A key finding of the research is that these organisations focus on cost optimisation: identifying and removing waste rather than simply cutting costs.

Their optimisation priorities involve overcoming poor visibility across IT estates, controlling financial waste from unused software, minimising licensing compliance risks, and addressing security vulnerabilities.

Reading the research was a real “aha moment” for me because—in all the essentials—this reflects my own professional specialism: IT Portfolio Management (ITPM).

Without necessarily naming it as such, the “Optimised Innovators” often use a blend of IT Portfolio Management disciplines to create their self-sustaining cycle of improvement. They spot waste in their current IT spending, deal with it, and then channel the resulting savings into innovations that deliver business value. These innovations in turn generate new efficiencies, creating funds for the next wave of improvement.

It’s a flywheel effect, transforming the IT estate from a cost centre to a strategic advantage with accelerating momentum—and at SoftwareOne we have seen it deliver advantages to organisations of every size, time and time again.

Components for success

The ITPM solutions we offer our clients bring together several integrated components:

• IT Asset Management creates visibility and control across all IT assets
• Application Portfolio Management streamlines your application landscape
• Publisher Advisory navigates complex licensing to maximise value
• Sourcing and Demand Management brings discipline to procurement
• FinOps controls cloud costs and optimises resource usage

The real value emerges when these elements work together as a comprehensive approach to optimisation and innovation.

Business impact

Through our own client engagements, we have seen that results can be impressive when this happens. One energy company cut 55% of redundant applications, generating £4M in first-year savings while creating a clear cloud migration path. A global financial institution slashed IBM audit exposure from $14M to just $7K, then saved $4.8M through smarter licensing and data optimisation. And a North American utility company cut applications by 17% and saved $2M in year one. More significantly, the visibility they gained established the foundation for an enterprise architecture practice that now ensures technology investments align precisely with business goals.