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Cutting software costs

Cutting Software Costs Without Hurting Productivity

How to reduce software spend while protecting the people who use it: which savings carry little risk, which need care, and the guardrails that keep users productive.

By the MI Solutions SAM team9 min read2 exhibits

Software cost reduction has a reputation problem. Many people have lived through a cost-cutting exercise that removed a tool they relied on, with no warning and no alternative. The result was lost time, workarounds and, eventually, new tools bought on a card. Those savings did not last.

The good news is that most software savings carry little or no risk to productivity, because they remove what nobody uses. The rest can be captured safely with a few guardrails.

Savings by risk to productivity

Exhibit 1
Most savings carry little risk to how people workSavings levers by size of saving and risk of disruption (indicative)SMALL, RISKY: AVOIDLARGE, RISKY: PLAN CAREFULLYSMALL, SAFE: ROUTINELARGE, SAFE: DO FIRSTSize of saving →Risk of disruption →Leaver licensesInactive seatsUnused add-onsPrice renegotiationRight-size tiersConsolidate toolsRemove a widely used toolPositions are indicative.

In a typical program, the safe levers make up the majority of the savings. That is why a well-run program can save a meaningful amount without anyone outside IT and finance noticing.

Exhibit 2
Most of the savings come from changes users never noticeShare of first-year savings by risk to productivity, illustrative program64%with no change toanyone's workLow risk: unused licenses, add-ons,price64%Medium risk: right-sizing tiers24%Higher risk: consolidation12%Illustrative. The mix depends on vendor portfolio and how long the estate has gone without review.

Three tiers of savings

01Low risk: do these first

Leaver and inactive licenses (nobody uses them), unused add-ons (nobody switched them on), and better prices and terms (the invoice changes, the tool does not).

02Medium risk: use data and communicate

Right-sizing tiers, based on feature-usage data, with a clear message about what changes and a quick upgrade path. See right-sizing.

03Higher risk: plan with the business

Consolidating tools, with the teams involved choosing the standard, data migrated and users trained. See application rationalization.

Five guardrails

  1. Notify before you act

    Give users notice and a reason. "We noticed you haven't used this since March" lands better than a silent removal.

  2. Provide a fast way back

    A license restored within a day prevents frustration and workarounds.

  3. Keep data intact

    Removing a license should not remove someone's work.

  4. Involve business owners

    They know which tools are critical, and when: never right-size the finance team's tools in the week of year-end close.

  5. Measure the impact

    Track support tickets and restoration requests after each change, and adjust.

What hurts productivity, and how to avoid it

Do
  • Base every change on usage data.
  • Give a date, a reason and a way to keep the license.
  • Keep a one-day restore promise.
  • Time changes around the business calendar.
Avoid
  • Removing a widely used tool without a replacement.
  • Cutting licenses to hit a target number by a deadline.
  • Right-sizing based on job titles instead of usage.
  • Changing tools in the middle of a critical period.

How MI One helps

Frequently asked questions

Will users notice reclamation?

Rarely, if you reclaim only from people who have not used the product, notify them in advance, and keep a fast route back.

How do we handle pushback?

Show the data: last-activity dates and cost. Most objections disappear when people see the license has not been used.

Should savings targets be set per team?

Usually not at first. Set them per vendor, where the data is, and report the effect per team afterwards.

See where your software budget goes

Bring your five largest vendors to a 30-minute call. Our SAM experts will show you where the savings usually hide, and how fast MI One can surface them.