4 ways to free up money for IT innovation

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Freeing up money in your IT budget for innovation might be easier than you realize. The key is to be proactive about identifying cost improvements. You need to be your own strongest budget critic to find the areas where you can free up resources, while also looking for creative ways to save on new projects.

Here are four places to look:

1. Look for savings in basic IT services

Equivalent capability is becoming less expensive. Opportunities abound for IT organizations to naturally reduce their costs for basic IT services such as networking, telephones, computing, and storage. You can take advantage of enterprise software enabled by open source. Don’t expect automatic savings though. It’s important to put plans and programs in place to take advantage of IT services that are becoming easy-to-purchase commodities. Simply putting one release into production won’t be enough. You’ll have to keep improving the solution, keep reducing the cost of the solution, and keep adding new business capability going forward. But if you build all of that into your plan, you can free up IT dollars to spend on other valuable projects.

2. Partner with the business

As your IT organization builds trust within your enterprise, find business partners who need technical help but don’t want to be in the IT business. Those organizations are typically looking for results, not an opportunity to procure and operate technology. See if they’re willing to invest their incremental resources either through funding or transferring budget for people in IT. Marketing might be a great place to start. By offering your IT services to them at a fair price, you may find they’ll be more inclined to turn to you rather than set up a shadow IT team to do it on their own.

3. Retire legacy systems

Start chipping away at legacy systems that are no longer well-suited to purpose. On a relative basis, that old technology just doesn’t get less expensive over time. It probably doesn’t even get less expensive on an absolute basis — just the opposite occurs. And that’s not considering the cost of reduced agility. So as you look to become more agile and responsive to the business, you’ve got to begin funding the retirement of your legacy systems.

4. Look for low-cost options

Innovation doesn’t have to be expensive. Look for opportunities to use low-cost or no-cost technology or incremental resources driven by the interests and passions of your employees. Start a manageable number of initiatives, figure out which ones are going to be successful, and invest more as they demonstrate value. Sure, you may have to do large-scale or huge innovation projects to remain competitive, as driven by your business. But that’s not the only thing you want to do. You want to be starting small and letting those flowers bloom, as well.

What are some creative ways you’ve reduced your expenses? How have you reinvested those savings?


Lee Congdon is CIO of Red Hat. His role includes enabling Red Hat’s business through services, such as knowledge management, technology innovation, technology-enabled collaboration, and process improvement.

Lee Congdon is Senior Vice President and Chief Information Officer at Ellucian, the leading independent provider of higher education software, services and analytics.

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