Purpose:
The Cost Optimization Model helps organizations maximize ROI by evaluating IT spend against value delivered. For SMBs, cost categories marked SMB are critical levers that yield immediate financial benefit. Optional categories are typically only impactful at larger scale and may be deferred until the business grows.
| Cost Component | Value Delivered | Total IT Spend | TCE (%) | Action Step |
|---|---|---|---|---|
| Hardware & Licenses SMB | -50% downtime | $2M | 25% | Consolidate vendors, bulk discounts |
| Software Subscriptions SMB | +30% deployment speed | $1.5M | 20% | Audit subscriptions, cancel unused |
| Labor (IT Staff) SMB | +20% time saved | $3M | 15% | Implement automation, reallocate staff |
| Maintenance Contracts SMB (minimal) | -40% incident rates | $0.5M | 80% | Renegotiate, prioritize preventive |
| Cloud Infrastructure SMB | -25% hosting cost | $1M | 30% | Migrate to hybrid cloud, optimize usage |
How to Use:
- Inventory all cost categories.
- Calculate value delivered and TCE.
- Consolidate, reallocate, or renegotiate resources.
- Direct savings to innovation initiatives.
Related Pages: PSITF Master Framework, IT Maturity Model, Integrated Planning
Trademark & Contact:
This framework/roadmap/model is a trademarked asset of Strategic Solutions, LLC.
Use requires express written permission.
Contact for Permissions or Advisory Support:
- Email (primary): [email protected]
- LinkedIn (optional): linkedin.com/in/bob-bartleson
Consulting Note:
For organizations seeking implementation guidance, advisory services are available.
