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Step 6: Cost Optimisation Strategies

Cost is ONE factor, not the only factor. Don't sacrifice functionality, connectivity, or flexibility for cost. Focus on eliminating waste, not cutting value.

Cost Optimisation Overview​

Key Principles:

  • Cost is ONE factor, not the only factor
  • Don't sacrifice functionality, connectivity, or flexibility for cost
  • Focus on eliminating waste, not cutting value
  • Balance cost with business needs, integration, and risk

Strategy 1: Eliminate True Waste​

Unused Tools​

  • Cancel tools nobody uses
  • Cancel tools that don't meet needs
  • Cancel redundant tools (true redundancy)

Overkill Tools​

  • Downgrade to tier that matches actual needs
  • Remove unused licenses
  • Cancel "just in case" subscriptions

Underutilised Tools​

  • Reduce user count to active users only
  • Downgrade to lower tier if usage is low
  • Replace with free alternative if it meets needs

Strategy 2: Negotiate Better Rates​

Tactics:

  • Annual billing discounts (10-20% off)
  • Multi-year commitments (20-30% off)
  • Competitor leverage ("Competitor X offers Y")
  • Usage-based discounts ("We're only using X%")
  • Bundle discounts (if using multiple tools from same vendor)

When to Negotiate:

  • At renewal time (best leverage)
  • When adding users/features
  • When competitor offers better deal
  • When usage is below plan limits

Strategy 3: Optimise Tool Selection​

Choose Tools That:

  • Meet your actual needs (not overkill)
  • Connect via APIs (reduces manual work costs)
  • Are flexible and replaceable (reduces risk costs)
  • Scale with your growth (reduces upgrade costs)

Avoid:

  • Overkill tools (paying for features you don't need)
  • Tools that don't connect (manual work costs)
  • Vendor lock-in (switching costs)
  • All-in-one tools (often more expensive and less flexible)

Strategy 4: Self-Hosting (For Flexibility & Cost)​

When Self-Hosting Makes Sense:

  • High monthly costs (£500+/month)
  • Need for flexibility and data control
  • Want to avoid vendor lock-in
  • Technical capability available
  • Long-term usage (2+ years)
  • Need for customisation

Benefits Beyond Cost:

  • Full Data Control: Your data, your servers
  • No Vendor Lock-In: You control the software
  • Flexibility: Can modify, customise, integrate as needed
  • Portability: Can move to different hosting if needed
  • Independence: Not dependent on vendor's business decisions
  • Cost Savings: Significant savings over 2-3 years

Cost-Benefit Example:

  • SaaS: £500/month = £6,000/year
  • Self-Host: Server £50/month + Setup £1,000 + Maintenance £250/year = £1,850 Year 1, £850/year after
  • Break-Even: ~4 months
  • 3-Year Savings: ~£12,000
  • Plus: Full data control, no vendor lock-in, customisation, flexibility

Previous: Step 5: Identify Redundancies & The "All-in-One" Myth
Next: Step 7: Implementation & Risk Mitigation