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Reducing operational expenditure (OPEX) has never been higher on the strategic agenda. Economic uncertainty, growing cyber threats, and pressure on profitability make it crucial for organizations to operate efficiently, agilely, and sustainably. Many organizations start by optimizing their cloud consumption. This is understandable, as cloud costs are visible and can often be directly linked to specific components such as compute, storage, and network traffic.
However, organizations that focus solely on their cloud bill see only a fraction of the bigger picture. OPEX is created in many more places than the invoice from a hyperscaler. The greatest opportunities for reducing OPEX emerge when the scope is broadened.
In this blog, we explore that broader view of OPEX, including the impact of business inefficiencies, the role of digital sovereignty, and software modernization.
Six areas where IT OPEX truly originates
Cloud costs are only one component of the total IT or digital operating model. In practice, operational costs arise from multiple domains. We highlight six of them here. By clearly identifying these areas, organizations can establish a more realistic foundation for effective cost optimization.
1. Cloud consumption (hyperscaler)
Cloud consumption refers to the direct costs of compute, storage, data transfer, and additional services. This is often the first area organizations target for optimization. However, it is rarely where the largest savings can be achieved across the entire value chain.
2. SaaS costs
The use of SaaS solutions continues to grow rapidly, and licenses often accumulate unnoticed. Poor license management leads to waste, varying pricing models, and a fragmented application landscape. The additional governance effort required and dependence on a SaaS provider’s innovation pace can become unexpected cost drivers. This is especially true when considering whether a SaaS provider aligns with an organization’s evolving digital sovereignty strategy.
3. IaaS and managed services operations
Many organizations have moved legacy applications to the cloud through a simple “lift-and-shift” approach. As a result, these applications now run on IaaS platforms while still relying on outdated technologies that require significant manual management. In such cases, the intended benefits of cloud migration fail to materialize, while operational costs continue to rise.
4. ITSM processes
Traditional processes such as change management, incident management, and problem management often do not align well with modern cloud environments and DevOps (Agile) ways of working. Limited automation and self-service capabilities, combined with dependencies on processes outside the DevOps team’s sphere of influence, create slow delivery cycles and high personnel costs. This can even contribute to the loss of key experts due to frustration and dissatisfaction.
5. IT delivery costs and lifecycle management
The way teams develop, operate, and modernize systems has a direct impact on OPEX. Without standardization and clear enterprise-wide architectural principles, integration remains difficult and reuse is limited. This often leads to significant variation in design choices, building blocks, and tooling, driving up costs.
By allocating costs directly to the responsible teams and making business impacts transparent, organizations can increase team involvement in financial management and encourage more cost-conscious decision-making.
6. Business inefficiencies
The greatest opportunities for OPEX reduction often come from stronger collaboration between business and IT.
Consider costs that arise outside the IT department but are caused by IT-related constraints. Examples include productivity losses due to slow systems, missed revenue resulting from downtime, or delays in product development caused by bottlenecks across the value chain. The time spent coordinating between business and IT teams during projects or change implementations is also a significant factor.
When these six areas are examined together, it becomes clear that OPEX is not merely a technology issue—it is a value-chain issue. That value chain extends from end users all the way to the technological foundations of the organization.
Business inefficiencies: The hidden cost center
Although cloud optimization is often the first step in cost reduction efforts, the largest gains usually come from an area that never appears on an invoice: business inefficiencies.
A single minute of delay in a critical workflow can multiply across hundreds of employees. An application outage immediately translates into lost productivity or even lost revenue.
Organizations that focus exclusively on IT costs therefore overlook the majority of the impact. Once business inefficiencies are included in the OPEX discussion, the conversation naturally shifts from cost reduction to value optimization. The objective is no longer saving money for the sake of saving money, but maximizing the value that IT delivers to the organization.
This broader perspective helps executives identify the true bottlenecks. In many cases, investing in modernization becomes the most cost-effective decision because more efficient teams, shorter lead times, and improved customer satisfaction deliver far greater value than simply reducing compute consumption.
Sovereignty and modernization pressure as strategic factors
In addition to operational challenges, structural developments are significantly influencing the OPEX discussion: cybersecurity and digital sovereignty.
The growing number of cyber incidents demonstrates that continuing to operate outdated systems is not only risky but also expensive. Examples include the cyberattack on Eindhoven University of Technology (TU/e) and the attack on Jaguar Land Rover in 2025. Legacy technologies require intensive maintenance, are more vulnerable, and often force organizations to make increasingly large security investments.
One alternative is IT modernization, for example through migration to Platform-as-a-Service (PaaS) solutions or serverless architectures. Modernization is not merely a cost-reduction measure; it is a necessary step to remain secure and agile.
At the same time, the debate around digital sovereignty has become more relevant than ever. Organizations want to maintain control over their technology, data, and dependencies. As a result, decisions regarding cloud providers, multi-cloud strategies, hybrid architectures, and portability have become strategic considerations.
Reducing dependencies and risks can sometimes increase both CAPEX and OPEX, yet still be the preferred strategic choice in support of business continuity.
This balance between autonomy, security, and cost ultimately determines which OPEX measures align with an organization’s strategy and its desired level of sovereignty.
Why only an integrated approach works
Reducing OPEX is not a project that can be solved through a handful of technical measures. It touches the very foundations of how an organization operates, innovates, delivers value, and maintains control over its continuity. That is why only an integrated approach is effective:
- Strategic – Leaders must clearly determine which costs matter and what value should guide decision-making.
- Organizational – Processes, roles, and governance define how effectively teams can work and how decisions are made.
- Data classification (risk-based) – Not all data carries the same level of risk sensitivity, allowing organizations to tailor measures accordingly.
- Technological – Architectural choices, automation, and modernization directly affect both costs and agility.
- Cultural – Cost awareness only emerges when it becomes part of everyday team behavior and ways of working.
These dimensions reinforce one another. A modern IT architecture only succeeds when processes evolve alongside it. Team efficiency benefits from clear standards and governance. And value-driven decision-making helps organizations position technology investments more effectively.
Organizations that adopt this integrated perspective almost always achieve structural improvements: lower enterprise-wide OPEX, higher quality, reduced risk, and an IT landscape that is far more closely aligned with business objectives.
The next step in sustainable cost optimization
OPEX reduction is evolving from a technical optimization exercise into a strategic discipline.
By looking beyond cloud consumption and considering the entire value chain—from business processes to development teams, and from data management to architecture—organizations can adopt an approach that not only reduces costs but also enhances value creation.
Organizations that embrace this broader perspective build a foundation that is agile, secure, and scalable. This makes them better equipped to compete in a market characterized by rapid change, where digital capabilities increasingly determine who leads and who falls behind.
Cost optimization should ideally begin by mapping the organization’s entire value chain. The next step is identifying where acceleration and optimization opportunities exist. To avoid turning the effort into a purely theoretical exercise, involve all stakeholders—from engineers to managers—and ask how they, together with their immediate teams and partners, can contribute to optimization.