A Software-as-a-Service company was facing rapidly increasing costs that were putting significant pressure on its bottom line. Checker Consulting identified and implemented a cloud infrastructure optimization initiative that reduced costs by 26% and helped the client move from red to black.
The Challenge
The client, a Software-as-a-Service company, was experiencing increasing costs and expenses following market turbulence and rising inflation in Sweden. The financial pressure was having a significant impact on the company’s bottom-line result.
The client had traditionally operated with a strong focus on cutting-edge technology. While this supported innovation and service quality, it had also contributed to a comparatively high operational cost base.
As market conditions changed and competition intensified, the need for stronger IT cost control became increasingly clear. The organization needed to develop a leaner and more sustainable cost structure without compromising its ability to innovate or maintain the quality of its services.
For the CEO, CFO and technology leadership team, the challenge was not simply to reduce individual expenses. The company needed to understand where external costs were being generated, determine which areas offered the greatest improvement potential and take action quickly enough to improve financial performance.
Checker Consulting and the client therefore embarked on a structured IT Cost Optimization initiative designed to improve efficiency, reduce expenditure and support the company’s long-term financial sustainability.
Checker’s Role
Checker Consulting was engaged to identify and implement cost-saving opportunities across the client’s external spend.
Our role included establishing transparency across expenditure, engaging relevant departments, analyzing and classifying spend categories, and identifying the areas with the highest potential for cost reduction and cost avoidance.
We also supported the client in conducting detailed due diligence on the prioritized areas and developing the strategy for the subsequent RFP, negotiation, supplier selection and contract award.
The objective was to create a fact-based IT sourcing strategy that could deliver measurable financial impact without compromising technology performance, innovation or service quality.
Our Approach
The work moved through three stages:
1. Analyzing external spend
Checker Consulting initiated a comprehensive review of the client’s external spend, with input from departments across the organization.
All expenses were reviewed and classified by spend category. The categories were then assessed and ranked according to:
- Their impact on the business, from strategic to routine.
- The complexity and risk associated with making a change.
- Their potential for cost reduction and value improvement.
- The time and effort required to complete an initiative.
- The speed at which financial benefits could be realized.
This structured spend analysis gave management a clearer understanding of the cost base and enabled the organization to focus resources on the opportunities with the strongest potential impact.
2. Prioritizing cloud infrastructure optimization
The analysis identified cloud-based infrastructure as one of the highest-priority areas for improvement.
The client was using several cloud providers, creating an opportunity to review the existing setup, consolidate services and establish a leaner and more controlled cost structure.
A detailed due diligence process was conducted for the prioritized area. This included data mining and information gathering to establish a complete understanding of annual and monthly volumes, technical specifications, service requirements and current expenditure.
The objective was to create a reliable baseline for IT infrastructure optimization and ensure that all future commercial decisions were supported by accurate and comparable data.
3. Developing and executing the sourcing strategy
Once the spend analysis, value assessment, internal interviews and market analysis had been completed, Checker Consulting developed the strategy for the RFP process.
The strategy covered the complete sourcing lifecycle, including:
- Definition of requirements and commercial objectives.
- Preparation and execution of the RFP.
- Evaluation of supplier proposals.
- Commercial negotiations.
- Supplier selection.
- Contract award.
The sourcing process resulted in the consolidation of the client’s cloud infrastructure services with one partner.
This provided an opportunity to improve pricing, simplify the supplier setup and optimize the overall cloud infrastructure cost structure.
The Results
The IT Cost Optimization initiative delivered a total saving of 26% across the client’s cloud infrastructure, combining direct cost reduction with cost avoidance.
Consolidating services from several cloud providers to one partner generated substantial pricing improvements and enabled the client to establish a leaner and more controlled operating cost structure.
The initiative delivered:
- A 26% reduction in cloud infrastructure costs.
- Stronger IT cost control and spend transparency.
- Consolidation of multiple cloud providers into one partner.
- A simplified and more efficient supplier setup.
- Reduced costs through both cost reduction and cost avoidance.
- A more sustainable technology cost base.
Most importantly, the financial impact contributed to the client moving from red figures to black figures in its income statement.
The result demonstrated that structured IT cost control is not about compromising innovation. By combining spend analysis, IT infrastructure optimization and a fact-based sourcing process, the client was able to protect service quality while creating a cost structure better aligned with its commercial and financial objectives.
