How To Reduce IT Costs Without Slowing Innovation: A 90-Day Framework

IT costs can be a large line item in the budget, but indiscriminate IT cost-cutting can backfire. That tension can put CIOs and CFOs in conflict. CIOs feel pressure from CFOs to trim budgets amid economic uncertainty and board scrutiny—yet they know that slashing spending in the wrong places can cripple innovation and create bigger problems down the road. 

This pressure can lead to ad hoc cuts that optimize for expense reduction without considering the loss of potential value creation. The way to reduce IT costs sustainably isn’t pursuing deeper cuts—it’s finding more predictable execution. 

Too often, short-term cuts “succeed” on paper but undermine critical capabilities; technical debt mounts, projects stall, security gaps emerge—and costs creep back in within a year or two.

The paradox that CIOs and CFOs must come to understand, together, is that strategic IT cost cutting can often accelerate digital initiatives. Research commissioned by Shopify and conducted by an independent consulting firm, for example, found that when enterprises migrate to platforms designed for faster, more predictable implementations, they're 3x more likely to stay on budget. They also experience 23% lower implementation costs compared to competitors.

This article will outline a practical framework for reducing IT costs while protecting—and even accelerating—innovation.

The IT cost paradox: Why traditional cost-cutting fails

Conventional IT cost-cutting tends to look the same in many organizations: the CFO mandates a blanket 10% budget reduction, every department tightens its belt, and short-term savings appear. Beneath the surface, however, this approach often trades one problem for several new ones. 

This is the classic IT cost-reduction trap. Across-the-board cuts inevitably trim muscle as well as fat. Yes, you will cut expenses, but you might also degrade service levels, delay key projects, or push business users into shadow IT. The hidden costs of these “savings” can outweigh the benefits: technical debt accrues as maintenance is deferred, important initiatives stall due to resource cuts, and security or compliance risks spike because corners were cut. 

Ultimately, the savings can be short-lived and can erode value faster than they improve the bottom line. The solution, however, isn’t to protect IT from all cost-cutting—it’s to pursue strategic cost optimization. If across-the-board cuts fail—and inaction carries its own cost—leaders need a more deliberate way to decide where to eliminate, optimize, and reinvest.

The false economy of across-the-board cuts

When a company says, “cut 10% everywhere,” it sounds fair and disciplined because every team shares the pain equally. But this approach can be dangerously misguided. 

Not all IT spend is created equal. Reducing each budget line by the same percentage often means underfunding something mission-critical. For example, cutting 10% from your cybersecurity budget might save a few dollars today, but could lead to a breach that costs millions later. The same pattern shows up in operations: cut too far, and service levels slip—slower incident response, more downtime, and frustrated teams. 

These efforts at “savings” create ripple effects, including service-level agreement (SLA) violations, unhappy customers, and staff burn-out that ultimately hurt the business. Arbitrary cuts optimize expenses in the short term while destroying value in the long term. 

And when cuts lead to slow delivery, the organization falls behind, often at a cost that far outweighs the quarter’s savings. 

The compounding cost of staying stuck

Some organizations are aware of the trap above, but avoid it by falling into a different one: the inaction tax. 

Often, IT leaders fearful of a costly, disruptive transformation will postpone necessary upgrades or digital initiatives in the name of cost discipline—but inaction carries its own price tag. Every month you delay modernization or stick with a clunky legacy platform is a month of lost opportunities and mounting hidden costs.

For example, if a new sales channel could generate $5 million in annual revenue, then a 12-month delay in implementing it effectively “costs” $5 million in unrealized revenue—on top of the ongoing maintenance spend to keep old systems on life support. This is the cost of delay: market share not captured, efficiency gains not realized, and innovations not pursued while competitors accelerate ahead. 

Maintaining aging infrastructure also incurs rising operational costs, including more manual work, more expensive specialist contractors, and often, higher failure rates. Meanwhile, customer experience suffers if your capabilities lag the market. Taken together, the inaction tax quietly drains value.

Doing nothing can feel thrifty, but it’s not actually free. Inaction compounds costs over time. 

To cut through both traps, leaders can reframe cost reduction as cost optimization: Reducing IT costs as a result of strategic optimization, not a goal unto itself. In other words, the solution isn't to cut more, or cut less—it's to cut smarter. Here's how.

The IT cost-optimization matrix: A strategic framework to reduce costs

To cut costs in the right places, it helps to first map where your IT budget is going and what value it delivers. It helps to segment IT spend into three buckets: Run, Change, and Grow. These correspond to core IT work: 

• Running the business (keeping the lights on)
• Changing the business (projects and implementations)
• Growing the business (innovation and new capabilities)

While many enterprises spend 60%–70% on Run, leading organizations aim to shift allocation toward higher-value Change and Grow initiatives. Over time, Change and Grow can lead to fewer Run costs. 

The cost-optimization matrix provides a framework to visualize these buckets. On one axis, you have these cost categories:

• Run 
• Change
• Grow

On the other axis, you have cost actions:

• Eliminate (stop something wasteful)
• Optimize (make it more efficient)
• Reinvest (move resources to higher value use)

Using this matrix, you can classify every cost item in IT and decide a strategy for it. 

Run costs (operations)

Run costs are the expenditures required to “keep the lights on.” This includes infrastructure, such as data center and cloud hosting costs, IT operations, support and help desk, security operations, software license maintenance, and routine system maintenance/patching. 

In many enterprises, this is by far the largest bucket. Many organizations allocate 60%–70% of their IT budget to operations and legacy system maintenance. That means the majority of IT spend is essentially nondiscretionary overhead. Leading organizations instead try to minimize the Run costs as a share of the budget to free up resources for change and growth.

Organizations start optimizing with a few targets, including:

• Eliminate waste: Start by hunting down “zombie” apps and resources—things that consume budget but no longer deliver value. Examples include systems or services running that few people use, or overlapping tools providing duplicate functions. 
• Optimize what remains: For the operational services you can’t cut, determine how to run them as efficiently as possible. Key tactics include infrastructure right-sizing and automation, and in cloud environments, this often means reviewing compute and storage allocations to eliminate overprovisioned capacity.
• Reinvest in higher-value platforms/services: Then, you can permanently lower run costs by shifting to more efficient platforms or service models. For example, platform consolidation can turn multiple fragmented systems into a unified platform that reduces integration and support effort. 

Run optimization frees resources for changing and growing the organization.

Change costs (projects)

Change costs refer to investments in IT projects, such as implementing new systems, upgrades, migrations, and large development efforts. This is essentially the capital expenditures (CapEx) budget in IT: one-time or time-bound project spend aimed at changing or improving the business. 

Typical allocation tends to be between 20% and 30% of IT spend here. Unfortunately, this is an area where cost overruns are frequent. Complex IT projects often run late and over budget, consuming far more resources than planned. As a result, optimizing Change costs is about doing projects better, which includes selecting the right ones and executing them efficiently.

Optimization levers in this bucket include:

• Eliminate low-value projects: Not every planned initiative should continue. By conducting a portfolio review, you can cancel or pause projects with low return on investment (ROI) or weak business alignment. Every dollar saved by not doing a low-impact project is a dollar that can support a higher-impact one.
• Optimize project delivery: For the initiatives you do proceed with, focus on predictable, efficient execution. Late and over-budget projects are a huge source of waste in IT. Faster timelines mean lower labor and consulting costs, and reaching go-live sooner means you start getting a return on the project faster, which reduces the carrying cost of the project.
• Reinvest in strategic initiatives: Ensure that your finite change budget is funding the projects with the highest strategic impact: projects that drive revenue, improve customer experience, or significantly reduce operating costs. These are initiatives that could pay back multiples in competitive advantage or new revenue. 

The right strategy can pull multiple levers at the same time. An independent consulting firm shows, for example, that brands migrating to modern platforms are 66% more likely to launch on time and 3x more likely to stay on budget. Projects like these optimize project delivery and push strategic initiatives with the same effort. 

Grow costs (innovation)

Grow costs are investments in innovation: the portion of the IT (or overall) budget devoted to new capabilities, experimental initiatives, R&D, and expansion into new markets or business models. 

This is typically the smallest slice of the pie in a traditional organization’s budget, often taking only 10% to 15% of IT spend, if that. Leading organizations increase their allocation here because this is where business growth comes from. The most prudent ones, however, fund it by squeezing efficiency from Run and Change, not by simply overspending. 

Optimization levers for Grow include:

• Eliminate innovation waste: The main culprits here are often shadow IT and duplicative tools that sprout up when business units try to innovate on their own without central IT visibility. For example, two different departments might each subscribe to separate AI analytics platforms for similar purposes, or various teams might be experimenting with overlapping martech tools. This leads to fragmentation and waste, and can also create security risks. 
• Optimize through consolidation and standardization: If every new innovative idea requires setting up a new piece of technology and integrating it with your core systems, costs will skyrocket. Instead, use platforms that support rapid innovation. A unified platform, for example, can cut down integration costs and ongoing maintenance.
• Reinvest in innovation: Ensure that a meaningful portion of any savings captured is earmarked for innovation. That could mean funding a pilot project in a new technology, accelerating a go-to-market capability, expanding into a new channel or geography sooner than planned, and innovating across customer-facing features. 

Innovation doesn’t necessarily mean innovating from scratch. The right partner—one with similar priorities and aligned interests—will innovate on your behalf. Shopify, for example, invests $1.4 billion annually in R&D, meaning more than 20 years of commerce experience baked into the platform. As a result, brands don't have to build and maintain these capabilities in-house. 

The 90-day IT cost-optimization playbook

A common reason cost initiatives fail is the lack of a clear, time-bound plan that delivers real savings quickly without causing chaos. Here, we break down an effort that can often seem overwhelming into a 90-day program. 

With a clear view of where to eliminate, optimize, and reinvest, the next step is disciplined execution.

This program includes three phases: 

• Phase 1: Visibility and quick wins (Days 0–30)
• Phase 2: Structural optimization (Days 31–60)
• Phase 3: Reinvestment and governance (Days 61–90)

Each phase has specific goals, owners, and an expected savings profile. 

Phase 1: Visibility and quick wins

The goal in Phase 1 is to gain full visibility into all IT costs and eliminate obvious waste. In the first 30 days, you want to pick the most obvious opportunities and reap the savings. 

These tend to be things that don’t require long approval cycles or major architectural changes. These options are straightforward cuts or optimizations that free up cash quickly. Equally important, this phase builds a fact base of where the money is going, which sets you up for deeper optimizations later.

1. Conduct IT cost inventory

Begin with a comprehensive mapping of all IT spend. This means gathering data on:

• All software and software-as-a-service (SaaS) subscriptions and their utilization
• Infrastructure costs (cloud bills, data center expenses)
• Vendor contracts
• Support and personnel costs.

Map each cost to the categories—Run/Change/Grow—and, if possible, to specific business capabilities. Also, identify an “owner” for each system or major cost item; this will determine who’s responsible for its use/value. 

This inventory can live in a simple spreadsheet or an IT financial management (ITFM) tool. The goal is to make the entire cost landscape visible. Often, going through this exercise reveals surprises, such as subscriptions or services IT wasn’t even aware of, or higher costs in certain areas than assumed. Transparency is the first step to rationalization.

2. Find zombie apps and redundant systems

With the inventory in hand, look for immediate candidates to cut. Identify applications with very low usage or that duplicate functionality. For example, if you have two project management tools across departments, could you eliminate one? 

Similarly, look for “zombie” applications—ones that have no clear business owner or where usage metrics in the last 90 days are near zero. Those can often be retired with minimal impact.

Also, scrutinize overlapping systems from past acquisitions or legacy holdovers that are no longer needed. You might discover, say, an old reporting tool still incurring fees even though a newer business intelligence (BI) platform replaced it. Retire them. 

By cutting redundant apps and right-sizing licenses, you can often harvest quick savings. In many organizations, a 5%–10% reduction in software license spend is achievable simply by eliminating unused tools. These cuts are typically low risk—if no one is using it, no one misses it.

3. Rationalize SaaS sprawl

Expand the net to include shadow IT: software and cloud services purchased outside IT’s visibility. Check expense reports and ask finance for software vendors that IT doesn’t directly pay. 

Also, use single sign-on logs and similar tools to discover cloud apps in use. Once identified, evaluate each: consolidate where possible and eliminate what’s not providing value. For instance, if the marketing team is paying for a separate analytics tool that overlaps with IT’s tool, decide on one and cut the other. 

Implement a policy that new SaaS purchases must go through IT or procurement for approval. This prevents further sprawl. 

You won’t eliminate shadow IT in 30 days, but you can meaningfully reduce it.

4. Right-size cloud infrastructure

If your organization has significant cloud spend, Phase 1 should include a basic cloud-cost review for quick wins. Cloud bills often contain low-hanging fruit like development or test instances left running, overprovisioned compute, or orphaned storage volumes and backups. 

Use cloud provider cost-analysis tools or third-party platforms to identify these. Implement auto-scaling where possible to match capacity to demand. 

Throughout, your CIO, and stakeholders across IT and finance will be key participants. Keep them aligned on priorities and trade-offs. Along the way, track key metrics, including:

• Costs eliminated (one-time and recurring)
• Number of systems retired
• Percentage of SaaS licenses actively used

It’s not uncommon to reduce cloud spend by 15%–25% through these optimizations without affecting performance.

Phase 2: Structural optimization

Now that the low-hanging fruit is out of the way and you have good visibility, Phase 2 tackles more structural cost issues. This means renegotiating key contracts, rethinking your tech stack, pruning the project portfolio, and optimizing support models. 

By day 60, you’re targeting an additional 15%–20% reduction in Change costs and perhaps another 10% in Run costs from these structural moves. 

1. Vendor contract renegotiation

With your cost inventory and Phase 1 cuts in hand, identify your largest vendor contracts and prepare to renegotiate. 

In some cases, you can consolidate vendors to increase volume leverage. If you have four different vendors for similar services, could you concentrate spend with one or two and negotiate a volume discount? Vendors are more inclined to cut pricing if they see a bigger deal or a renewal at stake.

You might also be able to better align contracts with actual usage. In Phase 1, you identified underused licenses, so you can now make sure you’re not paying for them going forward. If a software contract allows true-down (a reduction in contracted costs based on usage being lower than estimated), exercise that. If not, negotiate to remove those unused seats or switch to a more flexible subscription model. Many SaaS providers will offer flexibility if they think they might otherwise lose the account.

For strategic platforms that you plan to keep, consider signing a longer-term contract in exchange for a lower annual cost. Only do this for vendors you’re confident in and solutions you know you’ll need. Avoid locking into multi-year contracts for tools that may not align with your long-term roadmap.

2. Platform consolidation

This is a strategic but important move: identify areas where you have a fragmented tech stack that could be consolidated onto a single platform or fewer platforms. Common candidates include:

• Commerce platforms
• Customer relationship management (CRM) systems
• Analytics tools
• Content management
• Enterprise resource management (ERP) modules. 

Fragmentation increases costs not just in licenses but in integration and maintenance. For example, if you’re running separate ecommerce, order management, and point-of-sale (POS) systems, there’s an overlap that an integrated unified commerce platform could handle with lower combined cost. Unified systems eliminate a lot of middleware and data-reconciliation work, too, which is often a hidden cost sink. 

Research commissioned by Shopify and conducted by EY shows that implementations on modern platforms average 20% faster than competitors—meaning lower carrying costs, faster ROI, and less budget consumed by prolonged change programs. As a result, building the business case for consolidation is often easier than you think. 

3. Project portfolio pruning

In Phase 1, we looked for obvious project cancellations; in Phase 2, do a more thorough portfolio review with finance and business stakeholders. Score each ongoing project on criteria such as:

• Alignment to strategy
• Expected ROI
• Risk
• Spend to date
• Remaining cost
• Resource consumption. 

It’s time to make the tough calls on underperforming projects. Perhaps there are projects that made sense a year ago, but circumstances have since changed. If a project is, say, 50% complete but already over budget and the business value is now questionable, consider stopping it. Better to incur a partial loss than a total loss. 

Alternatively, consider deferring projects that are nice-to-haves in order to protect cash for must-have initiatives. Aim to free up at least the bottom 10%–20% of project spend. Reallocate those resources to either higher priority projects or to the innovation fund. 

4. Support model optimization

Another structural cost to examine in this phase is your IT support and operations model. Labor is a big part of Run costs, so finding efficiency here yields ongoing savings. 

Two primary tactics include tiered support with automation and using lower-cost resources for routine tasks. If not already in place, implement a Tier 1/Tier 2 support structure where Tier 1 can be handled by junior staff or automated systems and only complex issues go to Tier 2. Even if you automate a fraction of tickets, you may avoid needing to hire another support FTE, or you can redeploy existing staff to more proactive work. 

The goal is to maintain or improve service levels while reducing the cost per ticket or per incident. Often this is achievable through smarter tooling. In Phase 2, you might pilot a chatbot for IT support or introduce runbook automation for common server issues. Intelligent automation can reduce IT toil by giving IT more time for more complex issues and ensuring that users, once they reach IT, have already tried the most common troubleshooting steps.

Phase 3: Reinvestment and governance

The final phase is about locking in the savings and preventing the costs from creeping back. This means establishing ongoing governance for cost management and deciding where to channel the savings for maximum business impact. It’s also about transparently communicating the outcomes to finance and the rest of the team, to build confidence that IT’s cost optimization is yielding value and not just cutbacks. 

By day 90, you want a sustainable cost-management practice in place—so the improvements persist beyond this quarter—and a reinvestment plan that shows how savings will accelerate innovation and growth. 

1. Create an IT cost dashboard for the CFO and board

To maintain transparency and accountability, build a dashboard that shows IT spend and savings in a way finance executives appreciate. This dashboard might include:

• Current run rate vs. budget
• Breakdown of spend by Run/Change/Grow
• Realized savings to date from the initiative 

Highlight key metrics like cost per user or cost per order to show improvement. Also, crucially, show how the freed-up budget is being reinvested, and articulate it in a way business leaders understand. For example, “$2 million saved from optimizations is now funding Project X, which is expected to drive 15% revenue growth and initiate Project Y.” 

The CFO will appreciate a view that connects cost actions to business outcomes. Provide this view consistently—monthly or quarterly—to institutionalize cost oversight. Consistency builds trust: When finance sees steady tracking of savings and no surprises, support follows. 

2. Establish a cost-governance model

One-time cuts are great, but without governance, costs will slowly creep back. Establish a cost-governance model to prevent regression. 

Set policies such as “Run (maintenance) spend will not exceed X% of IT budget” to ensure you don’t fall back into an 80/20 maintenance-heavy situation. Conversely, set a minimum innovation spend percentage to protect Grow funds. This creates internal checks. If Run costs start to increase, it triggers a review to push them back down.

Require that any new significant IT spend goes through a value assessment. This preserves agility while preventing random spend from reappearing.

If you have significant cloud usage, adopt financial operations (FinOps) as a discipline. That means continuously monitoring cloud-cost efficiency, assigning owners to cloud spend, and iterating on optimization. Designate clear ownership for this function. The goal is to make savings foundational, not temporary.

3. Communicate trade-offs transparently

Throughout this program, and especially as you conclude it, communicate to stakeholders—including IT, business leaders, finance, and executives—what was cut, what was protected, and why. Transparency is key to building trust. 

Highlight what was protected, not just what was cut. This reinforces that cost optimization was done surgically, not reactively. 

A good communication tactic is to share specific examples of positive trade-offs, because this shows cost-cutting enabling growth, not hindering it. For example, by communicating a message like "By consolidating our commerce platform, we eliminated $500k in integration costs and redeployed that budget to launch two new markets 90 days faster,” the trade-off becomes clear and measurable. 

Internally, give credit to teams for finding efficiencies. Celebrate the DevOps team that saved cloud cost, or the procurement team that struck a better deal. Reinforce a culture that treats efficiency as a strategic advantage. 

4. Plan strategic reinvestment

Ideally, during Phase 2, you identified some promising areas to fund. Phase 3 is about firming those up and getting them underway. 

Coordinate with business leadership to choose investments with high impact. It could be launching a pilot in a new market, accelerating an AI initiative, or developing a mobile app that’s been on the wishlist. 

Make sure to articulate the expected value of these reinvestments—e.g., “by investing $500k in this new personalization engine, we expect to drive a 5% increase in conversion, worth $X in revenue.” This closes the loop: savings fuel improvements that drive measurable growth. 

How to partner with finance: Dashboards, communication, and governance

Cost optimization only works if finance trusts the numbers behind it. In this section, we focus on practical tools and techniques for working with finance on cost initiatives. 

Build a simple IT cost dashboard the CFO will trust

One of the most effective ways to collaborate with finance is to put the numbers in front of them regularly, in a format they appreciate. An IT cost dashboard is the best tool for this. Design it with a CFO’s priorities in mind: clarity, accuracy, and linkage to financial metrics. 

Here’s what a high-level dashboard might contain:

• Budget vs. actual: A chart or table showing the IT budget, the actual spend to date (or run rate), and any variance. This can be broken down by major categories (Run/Change/Grow or perhaps operating expenses (OpEx) vs. CapEx). 
• Spend by category: Illustrate how IT spend is allocated. For example, a pie chart or bar chart with categories like infrastructure, applications, personnel, and projects. 
• Key performance indicators (KPIs): These are metrics CFOs care about that link cost to business value. Examples: IT Spend as % of revenue, cost per transaction/order/user, and ROI on major projects.
• Cost savings realized: A summary number like “$Y million in annual savings realized to date” from the program.

Where possible, visualize these trends in graphs that the CFO can parse at a glance. 

Communicate trade-offs, not just cuts

Numbers alone don’t tell the full story. Communication around cost optimization should emphasize trade-offs and decision rationale rather than just listing cuts. Why? Because stakeholders, especially business partners and finance, need to understand that you made conscious choices that balance cost and value. This avoids the fear that IT just slashed things arbitrarily, which might hurt the business later. 

Frame each major cut as a decision with consequences considered. For example, instead of saying “We cut Project A ($1 million saved)”, say “We decided to delay Project A by one year, freeing $1 million, because its forecast ROI was lower than other initiatives and delaying it has minimal impact on current year revenue. This allows us to fund Project B, which has a more immediate benefit.” This shows you weighed the business impact and made a deliberate trade-off.

Similarly, highlight what was protected and why. It’s important to reassure teams that you didn’t undercut critical capabilities. For example, “We maintained our cybersecurity and compliance budgets at $X, because any cuts there would increase risk unacceptably. We also ensured customer-facing uptime was not compromised—24/7 support coverage remains in place.” By explicitly stating that, you alleviate fears of hidden risks.

The goal throughout is to build trust through transparency. 

Map each tactic to budget lines

CFOs expect you to connect the dots between what you’re doing and how it shows up in the budget and financial statements. One useful tool is a simple table that maps each cost-optimization tactic to its budget line impact, whether it’s a one-time benefit versus recurring savings, and the associated risk level. This gives a clear at-a-glance view of your plan’s components. 

For example:

Tables like these can help illustrate technology choices that enable better budgetary balances. Predictable implementation timelines and transparent pricing make it easier to control budgets and avoid the overruns that erode trust. That’s a case finance understands immediately. 

Case examples: Sustainable savings

The following examples show what reducing IT costs looks like when platform simplification and predictable execution are part of the strategy.

Carrier innovates faster and at lower cost

Carrier, a global provider of building and cold chain solutions, serves customers in 180 countries, and their range of customers includes dealers, distributors, service technicians, national accounts, and homeowners. Carrier migrated to Shopify to offer self-serve solutions that would suit their diverse customer base. 

With Shopify, Carrier can now:

• Launch new ecommerce experiences in 30 days, compared to approximately 9–12 months on their previous platform
• Produce new ecommerce websites for $100,000, instead of up to $2 million 
• Test ideas, iterate, and ship new go-to-market motions without the long lead times of their previous platform.

Carrier is an example of cost optimization in practice: With Shopify, Carrier can produce websites cheaper than they previously could, while reducing the time and cost required to launch new experiences. 

“Historically, it’s very expensive to build the types of ecommerce experiences we need. With Shopify, it takes a matter of weeks. At the pace of a startup, we are able to deploy commerce capabilities in the enterprise space,” says Steve Duran, associate director of global commerce at Carrier.

David’s Bridal performed a yearlong migration in just nine months 

David’s Bridal (David’s) is a wedding retailer with a 75-year legacy and nearly 200 retail stores, making digital transformation an important but intimidating prospect for the company. 

“We were no longer able to provide the experience we wanted,” says Ravi Raparla, David’s CIO. “We knew it was time for a modernization, and we knew we needed a completely new, unified foundation.” 

David’s partnered with Shopify and changed every aspect of the business. But with Shopify, a transformation that would have otherwise required years only required nine months. Across that short period of time, the company:

• Finished a complete ecommerce replatform
• Launched a new Canadian ecommerce site 
• Built the revolutionary Diamonds & Pearls concept store powered by unified customer profiles
• Developed first-of-its-kind interactive digital screens with endless-aisle shopping and real-time inventory capabilities

“In modern commerce, you either change or die. So we had to modernize every single touch point we had,” says Kelly Cook, CEO. The outcome underscores a core cost-optimization point: shorter, more predictable implementations reduce the cost and risk of change.

Future Glass sped up quotes through automation

Future Glass, the B2B arm of Glass Warehouse, a leading seller of shower door kits, once struggled with a manual quoting process. 

“There was no do-it-yourself option,” said Parker Vitek, Glass Warehouse’s content manager. As a result, the company was stuck with a highly manual sales process that included quotes from handwritten notes and sketches.

By partnering with Shopify B2B, the company was able to streamline their quoting and ordering processes, leading to:

• 340% growth in B2B sales
• 83% increase in conversion rate
• 80% decrease in time to quote railing jobs

An investment in automation led to both an increase in conversions and a decrease in time spent doing manual work. That’s the kind of trade-off that reduces manual labor while improving outcomes—exactly what cost optimization should do. 

Modern IT cost levers: SaaS, automation, and cloud TCO

To be comprehensive in our cost-reduction playbook, we should touch on these modern IT cost levers and how to harness them smartly.

Taming SaaS sprawl and shadow IT

One of the sharpest trade-offs of the last decade in IT is the explosion of SaaS apps. On one hand, SaaS can be fantastic for quick deployment and outsourcing non-core functionality. On the other hand, it has led to “SaaS sprawl”—dozens or hundreds of subscriptions, often unmanaged. Shadow IT—when departments buy their own software without IT’s knowledge—exacerbates this. 

The result? Redundant apps, unused licenses, and potential security risks add up quickly. To get SaaS sprawl under control:

• Centralize procurement.
• Conduct regular SaaS audits.
• Implement category management that consolidates tools by function.

Much of this can also be solved through adopting a unified commerce platform that reduces SaaS sprawl by consolidating capabilities that would otherwise require five or more separate tools.

Using automation and AI to reduce IT operational toil

Automation and AI are key tools for IT cost reduction because they enable you to do more with less human effort,—and human effort is often the most valuable resource in IT operations. Support, routine server maintenance, data backups, basic monitoring, and incident response can all eat up valuable hours. 

By automating these, you increase capacity without increasing cost, or free staff for higher-value work. Automation reduces error rates, speeds resolution, and improves SLAs.

Opportunities in this category include:

• Automated provisioning/de-provisioning
• AI-powered monitoring and alerting
• Self-service portals for common requests

Savings here compound: less manual work, faster resolution, and more capacity for strategic initiatives. 

Cloud vs. on-prem TCO: A neutral decision framework

Many organizations have a “cloud-first” mandate now, assuming cloud will always save money. While cloud certainly offers agility and can reduce capital expenditure, it doesn’t automatically guarantee lower total cost. 

It’s easy to overspend on cloud if not managed. On the other hand, clinging to on-premises (on-prem) infrastructure for too long can also be costly. 

The pragmatic approach is to evaluate total cost of ownership for workloads on a case-by-case basis. Decision criteria should include:

• Usage patterns (steady-state vs. spiky)
• Data-transfer costs
• Governance and compliance requirements

The best IT cost strategy isn’t ideological. Instead, prioritize workload-optimized placement with strong FinOps governance.

Common pitfalls (and how to avoid them)

As companies embark on cost reduction or optimization programs, some mistakes tend to crop up repeatedly. A failed cost initiative can be worse than none at all, as it could break things or demoralize the organization. Here are some pitfalls to avoid and how to mitigate them.

Cutting so deeply you break SLAs or security

There’s often pressure in cost-cutting to “go big.” CFOs might say, why not a 20% reduction instead of 10%? Cutting too deeply, especially in foundational areas like uptime, support, or security, however, can be disastrous. If you cut beyond a certain point, you risk system failures, outages, or breaches that cost far more than you saved. 

Establish non-negotiable guardrails up front. For example, decide that you will not compromise on maintaining a certain availability and security posture. If identifying cost savings in infrastructure, ensure redundancy is still in place. Similarly, don’t furlough your cybersecurity monitoring team to save costs; a breach could cost you millions and your reputation. 

Focusing only on OpEx while ignoring CapEx waste

Many cost programs fixate on OpEx because those hit the income statement directly—things like monthly services, support contracts, and headcount costs. But ignoring capital expenditures is a mistake. It’s in projects and big implementations that some of the largest instances of waste can occur, such as failed projects, software that’s really “shelfware,”, and overbuilt infrastructure. 

Instead, build a holistic view of your expenses that includes one-time costs and sunk costs. The previously discussed project portfolio pruning, for example, addresses CapEx in addition to OpEx. Also consider past investments: Did you buy an expensive software or platform that’s underused? Maybe part of your cost optimization is decommissioning or divesting those assets to reduce support costs and potentially recoup something. Or if a project has yielded nothing, maybe repurpose whatever was built for something useful. 

One-time savings without governance = cost creep returns

This pitfall is similar to what happens when people experience a rebound after a short-term fix: You cut costs aggressively for a while, hit a target, and then a year later, the costs all crept back because underlying behaviors didn’t change. 

Many companies do a big cost-cut during a recession, celebrate, then two years later find costs back at previous levels or higher. Why? Because they treated it as a one-off event. They cut budgets, but then gradually, new projects started, hiring resumed without controls, the application count went up again, and no governance was in place to keep costs lean. 

To avoid cost creep, you need continuous discipline. This means establishing a permanent cost optimization or FinOps function, and embedding cost checks into existing processes.

Optimizing for cost, not value

Perhaps the most common pitfall is focusing purely on cost metrics and losing sight of value delivered. In IT, the cheapest solution is not always the most effective or efficient in the long run. 

You could slash costs by using a cheaper vendor, but if that vendor provides poor service, the business might suffer. You could also choose a lower-cost platform with fewer fees, but if it requires tons of custom development and slows time to market, your total business value is lower. So, don’t let the lowest cost blind you to TCO and value creation. 

Always evaluate the value impact of a cost decision. This means assessing not just direct cost, but the effect on revenue, speed, quality, and risk. The goal is cost optimization, not cost minimization, no matter what. Sometimes, spending a bit more is the right call if it yields much greater returns or avoids big risks.

As we discussed, a platform with better total cost of ownership and faster implementations delivers more value than a cheaper platform with hidden costs and long, risky migrations. Independent research shows Shopify delivers up to 36% better total cost of ownership compared to competitors—accounting for platform fees, operational costs, and implementation expenses.

Long-term planning, long-term payoffs 

The cheapest short-term option often creates higher long-term costs or lost revenue. Focus on the total cost of ownership and choose investments that give the best return, not just the lowest price tag.

Use the IT cost-optimization matrix to understand where your IT spend is concentrated, and use the 90-day playbook to eliminate waste and reinvest strategically. 

Shopify’s unified commerce model reduces the hidden costs that often inflate total cost of ownership—integration complexity, prolonged implementations, and maintenance overhead. The result isn’t just lower spend—it’s a more efficient operating model.

The goal isn’t to make IT spend as little as possible. It’s to maximize value per dollar, aligned to business priorities. It’s not about spending less. It’s about building systems that waste less—and reinvesting the difference in growth.