Strategies to Reduce ITSM Costs as the Financial Year Ends

March 20, 2025

The end of the financial year often brings challenges, especially for IT service management (ITSM) teams. Between tighter budgets and increased pressure to drive efficiencies, finding ways to do more with less is the name of the game. But cost reduction should never come at the expense of service quality—it’s a delicate balance to strike.

Whether you’re an IT Director, Service Desk Manager or Change Manager, the good news is that there are smart, practical strategies to help you save costs while maintaining excellence in your IT services. This blog will provide actionable insights and techniques to keep your ITSM operations running efficiently as you approach the financial year-end.

As the financial year draws to a close, the pressure intensifies—unused budget might be lost, while demonstrating value from current investments becomes critical to securing next year’s funding. Many IT leaders face the classic ‘use it or lose it’ dilemma, where hasty year-end spending rarely delivers optimal value. Others are scrambling to find last-minute savings to meet targets or offset overspending elsewhere. Rather than panicking or making short-sighted cuts, this guide offers strategic approaches that deliver immediate savings while positioning your department for stronger performance in the coming fiscal year. The goal isn’t just to survive year-end budget constraints but to use this pressure point as a catalyst for meaningful, sustainable improvements.

The Current ITSM Cost Challenge

Let’s face it—IT departments are currently feeling the pinch. Rising inflation, economic uncertainty, and increasing digital demands are straining IT budgets. Service delivery managers and other leaders are expected to deliver high-quality services while staying within shrinking budgets—a difficult combination, to say the least.

Traditional cost-cutting approaches, such as slashing services or reducing headcount, might appear to offer a quick fix. However, these often lead to issues like burnout, skill gaps, and diminished service quality—problems that only cause more significant cost burdens in the long term. If you’re going to trim expenses, it’s crucial to do so with a scalpel, not a sledgehammer.

Instead, a strategic approach is needed—one that prioritises efficiency without sacrificing effectiveness.

Strategic Prioritisation Framework

Before jumping into specific strategies, it’s essential to establish a framework to guide your decision-making. Not every cost-reduction idea is worth pursuing; some may even do more harm than good. A structured approach will help you focus your efforts and resources where they matter most.

Here’s how to start:

Conduct a Cost-Impact Assessment: Take a good look at where your money is going across your IT services and figure out which areas cost the most. Ask yourself: “Where can we trim spending without affecting the quality of our services?” Start by gathering some basic numbers on what different areas cost you—things like your help desk, managing changes, and handling problems when they pop up. You’ll often find that some expensive areas aren’t delivering much value to your business. Look for places where costs have increased over time, but service hasn’t improved. Compare what you’re spending against how happy your users are—this quickly shows where money might be wasted.

Identify High-Value, Low-Effort Opportunities: Look for quick wins—changes that save you money without requiring huge effort. While your team can spot many of these internally, many organisations find that bringing in outside experts for a focused assessment helps identify opportunities you might miss when you’re close to the day-to-day operations. These assessments typically give you a clear plan for the next 12 months, helping you map out savings throughout the coming financial year. Even with the current financial year ending soon, planning now puts you in a stronger position for the new budget cycle. If you’re curious about how this might work for your organisation, we can share real examples of how similar companies have benefited.

Use a Decision Matrix: Create a simple chart to help you decide what to tackle first. Draw a grid with “How easy is it to do?” on one side and “How much will it save?” on the other. Then, place each idea on this grid. The ideas in the “easy to do and saves a lot” corner are your starting points. For example, setting up self-service password resets is typically quick to implement but saves countless support hours. Also, consider timing (can you finish it before year-end?), what people and skills you’ll need, and how it fits with your bigger goals. Review this chart regularly as you progress, and focus on what matters most.

This practical approach turns vague cost-cutting goals into specific actions you can take right away. By focusing on changes that give you the biggest bang for your buck, you’ll build momentum with early wins while developing a plan for longer-term savings. This approach also helps you clearly explain your decisions to others in the business, making getting everyone on board with your money-saving plans easier.

Strategy 1: Renegotiate Vendor Contracts

Negotiating with your vendors doesn’t have to feel like pulling teeth. When approached strategically, it can be one of the quickest and most effective ways to rein in costs.

Audit Your Current Contracts: Start by gathering all your vendor agreements in one place. Look for services you’re paying for but hardly use or tools that overlap with others you already have. Are you paying for “gold-level” support when you only ever use basic help? Create a simple list of what each contract costs you when it renews and what you actually use it for. This quick review often reveals savings hiding in plain sight – like that gym membership you forgot you had but still pay for monthly.

Focus on Key Contract Elements: When reviewing contracts, don’t just look at the bottom-line price. Check if you’re paying maintenance fees for systems you rarely update. Count your actual users versus how many licences you’re paying for. Could you move from paying everything upfront to spreading costs – or vice versa? Timing matters, too – vendors are often more flexible at the end of their quarter or year when they’re trying to hit their targets. These adjustments might not sound exciting, but they add up quickly.

Prepare for Conversations: Before calling your vendors, do a bit of homework. Know how much you’re spending and how much you’re actually using their services. Have a friendly chat rather than making demands – “We’ve noticed we’re only using about half our licences – can we adjust our package to better match our needs?” Most vendors would rather keep you as a happy customer, paying a bit less than lose you entirely. You might be surprised how willing they are to work with you when approached with a reasonable request.

Use Your ITSM System as a Vendor Management Tool: While this might not save money immediately, setting up your ITSM system to store supplier information, performance data, and links to contracts will pay dividends in the next budget cycle. Having this information in one place makes it easier to spot opportunities for consolidation, track whether vendors are meeting their promises, and know exactly when contracts are up for renewal. Consider implementing this approach now so you’re fully prepared for next year’s budget planning – it’s like organising your toolbox before starting a big project.

Practical conversations and better vendor visibility can yield immediate cost reductions with minimal disruption to operations while setting you up for smarter decisions in the coming financial year.

Strategy 2: Invest in Automation

It might sound counterintuitive to invest in new tools to cut costs, but automation offers one of the best returns on investment (ROI) in ITSM. A well-implemented automation initiative can reduce repetitive tasks, free up staff time, and drive efficiencies across the board.

Focus on High-Return Self-Service: Build or improve self-service portals with robust knowledge management capabilities. A well-maintained knowledge base written in everyday business language (not technical jargon) helps users find solutions without raising tickets. For example, common issues like “How do I connect to the VPN?” or “Requesting access to marketing files” should be easily searchable. Pair this with an intuitive service catalogue projects that uses familiar business terms rather than IT terminology – think “Set up a new starter” instead of “User provisioning request.” When users can easily understand what they’re requesting, adoption rates soar, and ticket volumes drop significantly. In our experience helping clients improve their ITSM operations, implementing proper self-service capabilities with integration to configuration data has significantly accelerated ticket logging processes. Users can quickly identify which assets they’re experiencing issues with through the portal, eliminating time-consuming back-and-forth with the service desk to establish basic information. While the primary goal was improving data quality, clients have seen valuable efficiency gains that translate directly to cost savings through reduced handling time.

Quick-Win Automation Projects: Simple automation can deliver immediate savings with minimal setup time. Password resets are the classic example – they typically account for 20-30% of all helpdesk calls but can be fully automated through your service portal. Other quick wins include automating the onboarding process with pre-approved software packages based on role, setting up automatic ticket routing based on keywords, and creating approval workflows that notify managers via email with one-click response options. Even basic chatbots that handle the top 5-10 most common queries can free up significant helpdesk time while providing users with instant responses.

Implementation Considerations: The best automation starts small but scales quickly. Begin with a single process that causes the most pain – perhaps those time-consuming monthly reports that your team cobbles together manually or the repetitive checks they perform each morning. Make sure to involve the people who currently do the manual work; they’ll have invaluable insights about edge cases and potential hiccups. Create clear before-and-after metrics – if password resets previously took 15 minutes of staff time and now happen automatically, that’s a measurable saving you can report. Finally, don’t forget to communicate wins to users and stakeholders – automation that nobody knows about won’t get used.

Even modest automation before the financial year closes can show impressive savings—enough to justify further investment in the next budget cycle. The key is starting with painful and frequent processes. The time you save through automation doesn’t just cut costs—it frees your talented team to focus on higher-value work that moves your business forward.

Strategy 3: Streamline IT Processes

Streamlined processes are the backbone of a lean, cost-effective ITSM operation. By improving workflows, you can achieve significant time and cost savings without investing in new tools or reducing service quality.

Evaluate for Lean Efficiency: Take a close look at how work actually happens, not just how it’s supposed to happen on paper. Watch a typical incident from start to finish – where do teams spend the most time waiting? Are there handoffs where issues frequently get stuck? Map out your most common processes and time for each step. You’ll often find surprising delays – perhaps approvals sitting in someone’s inbox for days or tickets bouncing between teams because roles aren’t clear. We’ve helped numerous organisations identify unnecessary steps in their ITSM processes. In one instance, a client’s change approval workflow included multiple redundant reviews that added days to implementation timelines without improving outcomes. Simply streamlining this process created immediate capacity within the team, allowing them to handle more changes with the same resources – a clear cost efficiency even without precise metrics.

Address Common Blockers: Communication gaps between IT and other departments are often the biggest culprits behind wasted effort. Create regular touchpoints between IT and key business units – not formal meetings, but quick stand-ups to share priorities. Use plain language that both sides understand rather than technical terms. Simple collaboration tools can help bridge these gaps without adding complexity. For example, creating a shared Teams channel for the marketing department and their IT support contacts can prevent the all-too-common situation where marketing launches a campaign without IT knowing about the expected increase in website traffic.

Use Value Stream Mapping: Don’t be put off by the formal name – this is simply the process of tracking each step in your workflows to spot waste. Gather the actual people who do the work (not just managers) and map out every step from start to finish for key processes like onboarding new employees or resolving major incidents. Mark each step as either adding value or not. Be ruthless – steps that don’t directly contribute to the outcome are candidates for removal. For instance, does every software request really need three levels of approval? Does your change advisory board need to meet weekly, or could it review routine changes asynchronously? Trimming these non-value steps often costs nothing but saves enormous time.

Validate Your Improvements: Once you’ve made changes, measure the results to confirm you’re heading in the right direction. Simple before-and-after metrics tell the story clearly: How long did a typical change take last month versus this month? How many steps were involved in provisioning a new user? Has first-contact resolution improved? Share these improvements with both your team and stakeholders to build momentum. Celebrate wins publicly to encourage further process improvements. When teams see that streamlining actually makes their daily work easier (not just saving the company money), they’ll become enthusiastic participants in finding the next opportunity.

Process improvements often deliver the best bang for your buck in cost reduction because they require minimal investment beyond time and thought. The efficiency gains can be substantial and immediate – helping you close out the financial year stronger while setting you up for continued savings in the months ahead. Best of all, streamlined processes reduce frustration for IT teams and users, creating a more positive environment alongside the cost benefits.

Strategy 4: Adopt a Shared Services Model

A shared services model allows IT teams within larger or even across organisations to pool resources and reduce costs. It’s worth noting that implementing this approach is typically a longer-term initiative rather than a quick end-of-financial-year fix. While you might not see the benefits before your current budget cycle closes, planning now could position you for significant efficiencies in the 2025/26 financial year and beyond.

Practical Implementation: Start by identifying common functions across different departments or business units. Service desk operations, device provisioning, and application support are often good candidates. Look for areas where skills are similar but currently duplicated across teams. Rather than attempting to centralise everything at once, begin with a pilot for one function—perhaps first-line support or user onboarding. This allows you to refine your approach before scaling. Though full implementation won’t happen overnight, the planning phase can begin immediately, with gradual transitions occurring throughout the next financial year.

Governance Requirements: Effective governance is essential for shared services to succeed. Create a framework that balances centralised efficiency with responsiveness to individual department needs. Establish clear service level agreements that define what users can expect and set up regular review meetings with representatives from each area served. Develop escalation paths for when standard processes don’t fit unique situations. Without proper governance, shared services risk becoming disconnected from the business units they support—so invest time in getting this right from the start.

Service Portfolio Rationalisation: One of the most impactful aspects of shared services is the opportunity to eliminate redundant tools and processes. Many organisations discover they’re running three different remote support tools or multiple asset management systems simply because departments made purchases independently. Create an inventory of current tools across all teams, identify overlaps, and develop a plan to standardise the best options. This consolidation not only reduces licensing costs but also simplifies support and training. While the full benefits may take time to realise as contracts expire, the planning work can begin immediately.

Engage Stakeholders Moving to shared services represents a significant change, and stakeholder resistance can derail even the best-planned initiatives. Start conversations early—well before implementation—and focus on the benefits to each department rather than just cost savings. Address concerns honestly and involve key stakeholders in designing the new model. Create regular communication channels to share progress and gather feedback. Remember that successful shared services require cultural change as much as structural change, so budget plenty of time to bring people along on the journey.

While shared services might not deliver immediate end-of-year savings, beginning the planning process now is an investment in your next financial year’s efficiency. The most successful shared services implementations take a measured, phased approach rather than attempting a “big bang” transformation. By starting the groundwork in this budget cycle, you’ll be well-positioned to realise benefits early in the 2025/26 financial year, potentially delivering substantial savings for your 2026/27 budget planning.

Key Takeaways:

Renegotiate vendor contracts now for immediate financial year-end savings
Implement targeted automation projects that deliver quick ROI while building a foundation for future efficiencies
Streamline processes for cost-free improvements with a substantial impact
Begin planning shared services implementation for next year’s budget cycle
Use the prioritisation framework to focus efforts where they’ll deliver maximum value
Remember that strategic cost reduction enhances rather than compromises service quality

Take Action and See Real Savings

Balancing ITSM costs with service quality doesn’t have to mean compromises. By following these strategies—renegotiating vendor contracts, investing in automation, streamlining processes, and adopting shared services—you can reduce costs while maintaining excellence in service delivery.

Start by prioritising the quick wins that deliver immediate value, and build on your progress from there. With the financial year-end approaching, there’s no better time to take action.

Need help crafting a tailored cost-reduction plan? Get in touch with our team for a free assessment. Together, we’ll create a roadmap to drive efficiency and savings for your ITSM operations.

How CIH Solutions Can Help

At CIH Solutions, we specialise in helping organisations like yours navigate the complexities of ITSM cost optimisation. We understand that every organisation is unique, which is why we take a tailored approach rather than offering one-size-fits-all solutions.

Our process begins with a comprehensive assessment of your current ITSM environment, identifying specific opportunities for cost reduction and efficiency improvements. We then work with you to prioritise these opportunities based on your unique constraints and objectives.

Whether you need support with vendor negotiations, process optimisation, automation implementation, or shared services development, our team brings practical experience from over 200 successful ITSM implementations. We’re not just consultants—we’re practitioners who understand the real-world challenges you face.

Most importantly, we focus on transferring knowledge to your team, ensuring you can sustain the improvements long after our engagement ends. Our goal isn’t to make you dependent on us but to help you build lasting capabilities within your organisation. Ready to explore how these strategies could work for your ITSM operation? Let’s schedule a conversation to discuss your specific challenges and opportunities.