The Hidden Cost of Tech Waste—and How to Maximize Your IT Budget

When a major bank planned to upgrade 7,000 laptops during a standard refresh cycle, they decided to look at the usage data first. What they saw shocked them—and saved them more than $9 million. Because that real data usage revealed that only 600 out of the 7,000 laptops actually needed replacing. Rather than enforcing a mandatory refresh cycle, they used data to make a more thoughtful decision.

Thanks to new technologies, enterprise IT has more opportunities than ever to unlock savings and boost efficiency by optimizing resources. Leading companies embrace proactive, data-driven IT that improves visibility, reveals hidden costs, and automates standard processes. The benefits are impressive: less waste, improved financial performance, and higher digital employee experience (DEX) scores.

Aligning IT Investments with Broader Business Priorities
On average, more than half of IT budgets are spent on maintaining business operations, according to industry estimates. Certainly, IT needs a sizable budget to support hardware, software, and processes that are already in place. But how do you know how much of your maintenance budget is being spent on IT waste?

Now, thanks to AI-enhanced data collection and analysis, IT leaders are getting a much clearer picture of how much money is being wasted. For example, a financial services company uncovered that they were spending $4.3 million on software licences that were never used.

CIOs are under pressure to get the most from their IT budgets, which includes using AI to uncover waste. An EY survey found that 37% of CEOs planned to fund investments in AI by reallocating capital from other budgets. This shift reflects the promise of AI-driven tools in delivering greater efficiency and strategic cost management. So, how do you ensure IT spending delivers real value for your organization and helps you avoid wasted dollars?

Five Key Strategies for Reducing IT Waste
1. More Visibility (and High-Quality Data)
You can’t understand the problems if you can’t see them. Digital employee experience (DEX) monitoring software gives you access to endpoints in every device across the IT estate, offering a clear view of what’s truly needed—and what’s not (like underutilized hardware). DEX platforms utilize various sensors to collect data across numerous endpoints; leading options can analyze more than 10,000 data points every few seconds. This data fuels an embedded AI engine that predicts and resolves issues, often before they impact end users, improving system reliability and user satisfaction.

Greater visibility underscores the importance of high-quality data. Poor data quality costs organizations millions of dollars each year, according to Gartner. Making trustworthy IT decisions requires data that is broad in scope, deep within each area, and is collected frequently enough to capture real-time conditions. Without that data, you’re more likely to make costly mistakes, and waste money on unnecessary updates—while missing the real risks throughout your organization.

2. Real-Time Insights
If IT is simply trying to keep up with help desk tickets, they will always be a step behind. But with real-time diagnostics and insights that track data related to memory, latency, and crashes, your IT team can intervene instantly and resolve issues quickly and efficiently. In one case, a global insurance company used real-time insights to identify and fix a problem that tied up approximately 20% CPU, yet wasn’t being reported by users.

3. Intelligent Action and Predictive Analytics
Now you can proactively prevent IT issues before they escalate even further. With intelligent action, if a server is about to crash or you’re running out of software licenses, predictive analytics can alert IT teams before disruptions occur. We’ve already seen these AI-driven intelligent actions save enterprises time and money, including an organization that resolved a bandwidth-heavy update before it affected hundreds of users.

4. Automation
Automation complements intelligent action by performing IT fixes at scale. One company saved $200,000 annually and cut its MTTR (Mean Time to Repair) simply by automating responses to 800 monthly tickets. By leveraging AI to handle repetitive issues such as password resets and software crashes, IT teams can focus on higher-value challenges and be more efficient with their resources.

5. Transformation
When you implement these factors, you’ll likely see IT transform from a cost center into an innovation driver. Eliminating wasted hardware and software can free millions of dollars to fuel innovation. AI has extraordinary potential to drive efficiency, which is why more than half of executives expect AI to deliver cost savings, according to research from Boston Consulting Group.

As AI and machine learning get more powerful, the IT management landscape will continue to evolve and, ideally, become more proactive. Increased visibility and implementation of data-driven IT models will lead to continuous improvements and productivity-focused integrations. Robust monitoring tools (fueled by high-quality data) will allow IT leaders to oversee these changes while improving user experiences. AI-driven analytics will unlock new insights, automations, and predictions.

Ultimately, using AI to eliminate IT waste allows CIOs to take the lead and use these savings to focus on organization-wide strategic initiatives, including enhancing the digital employee experience to improve employee satisfaction and retention. Today’s tech environment is the perfect opportunity for CIOs to prove how IT can strategically drive business growth, efficiency, and fiscal responsibility.

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