IT transformation: increase efficiency, reduce costs
How a leading car manufacturer saved 250 million euros through targeted IT optimization – and secured its digital future in the process.
Table of contents
Introduction
EUR 250 million saved, 40% fewer applications, EUR 200 million freed up for strategic digital projects
A leading car manufacturer was under massive cost pressure. Significant budget savings were to be realized within six months – without operational risks. Together with an experienced partner from the consultingheads network, a radically pragmatic optimization program was launched. The aim was not only to reduce costs, but also to strategically realign the IT landscape.
Niklas Scipio - The expert behind the transformation
Niklas Scipio is an experienced strategy and transformation consultant specializing in leading complex IT and business transformations. With a background With a background in software development and many years of experience at leading consulting firms such as the Boston Consulting Group, he has developed a deep understanding of the challenges faced by global companies and private equity investors. His focus is on the implementation of time-critical projects, including the optimization of global IT and application portfolios, post-merger integrations and digital transformations. With a clear and precise approach, he helps companies to manage risks, simplify processes and create sustainable added value. His expertise is valued by clients operating in politically sensitive and highly dynamic environments. As an independent consultant, he helps companies to manage complexity and secure long-term business success.
Challenges
Why companies need to rethink their application landscape
Particularly in corporations with extensive IT landscapes, up to 40% of applications are underutilized or redundant – a potential saving of up to 25% of annual operating costs.
The car manufacturer in question presented a typical picture: a fragmented IT landscape with numerous individual regional solutions led to duplicated costs, increased maintenance costs and a lack of controllability. License and operating costs rose continuously, while the CFO demanded significant savings in the short term – with a clear target horizon of six months. Without central governance, decisions were made decentrally – resulting in inefficient procurement processes and a lack of transparency.
Solution approach & procedure
APO - Application Portfolio Optimization
Instead of lengthy strategy discussions and PowerPoint beauty contests, the consultant opted for a clearly structured, activist approach to Application Portfolio Optimization (APO). But what exactly does that mean?
Application Portfolio Optimization is a strategic approach to simplifying and modernizing the IT application landscape in order to cut costs, reduce complexity and align IT with future business requirements. Particularly in the automotive industry, where technological innovations and efficiency gains are crucial, targeted optimization of the application portfolio can unleash enormous savings potential and accelerate the digital transformation.
The following case study shows exactly how Niklas Scipio implemented this approach at the car manufacturer and what successes he was able to achieve.
| Traditional IT cost reduction initiative | Activist Application Portfolio Optimization Program (APO) | |
|---|---|---|
|
Ideal when |
Money is needed in the short term to finance larger initiatives |
Ensuring the future viability of the IT landscape – savings as a side effect |
|
Financing |
Possible self-financing – early savings can finance subsequent phases
|
Structured
Project financing plan required
– higher initial costs and longer amortization periods |
|
Duration |
6-12 months |
2-3 years |
|
ROI |
Fast (4 to 6 months) |
12-18 months with first quick
wins in the first six months |
|
Complexity reduction |
Low – no strategic
transformation |
Significant – reduction of technical debt and improvement of the system landscape |
If you want to transform an IT portfolio with over 1,000 applications, you need more than an Excel model. It’s about clarity, speed – and the courage to make decisions before they have been fully validated. In this case, a pragmatic 4-phase program was implemented that was not focused on methods, but on impact.
The first phase was all about one thing: creating complete transparency – making visible what no one wanted to see before. All applications were recorded centrally, evaluated technically, functionally and economically and classified according to their contribution to value creation. However, the result was sobering, as a large proportion of the systems proved to be superfluous, outdated or redundant.
Successful transformation projects do not start with assumptions, but with a ruthlessly honest stocktaking – often against the resistance of individual departments. The decisive factor here is not to put the facts up for discussion, but to document them consistently in a central EAM system: transparent, comprehensible and accessible to all.
It is often overlooked that workshops alone, without a clear basis for decision-making, do not lead to any savings. For this reason, the first step was to prioritize specific quick wins – applications that could be switched off without risk. The result: a reduction of 5% within six months and an immediate effect of 25 million euros. At the same time, outdated license agreements were identified and renegotiated.
In the second phase, the focus was on simplification. The aim was to establish a global target architecture – not as a theoretical construct in PowerPoint, but as a shared structure with clearly defined design principles. Isolated regional solutions were merged and existing redundancies were systematically eliminated. Instead of endless discussions about the perfect individual solution (“best of breed”), the pragmatic principle of “good enough globally” was applied: 90% standard worldwide is better than 100% individuality in each region.
The architecture was not an end in itself, but served as a strategic filter: Which systems and approaches contribute to scalability, governance and business capability? What is too complicated, too isolated or hinders the transformation?
In order to create trust in the new direction at an early stage, the first pilot projects were deliberately launched – not to test technologies, but to show people in an often politicized organization: Change is feasible – and it works.
The third phase was no longer about debate, but about implementation. Applications were migrated, transferred or switched off, technical debts were systematically reduced and outdated legacy systems were removed. Right from the start, not every decision had to be perfect – but none could be without consequences.
What made this phase so successful was a clear focus on implementation. Decisions were made with 80% certainty – but implemented with 100% commitment. Governance structures were not set up as an afterthought, but established in parallel with the operational project. All progress was recorded transparently and in real time in a central value dashboard – visible to everyone involved.
Another key success factor was the introduction of a global management system with binding EAM policies and clearly defined escalation mechanisms. Instead of Excel chaos and non-transparent shadow processes, there were now clear responsibilities and real transparency.
In the fourth phase, the focus was on permanently anchoring the results achieved and avoiding new dependencies. While many programs fail to remain truly connectable in everyday life, a different approach was taken here from the outset. A robust governance framework was used – not as a controlling authority, but as a tool for self-management.
The teams were set up in such a way that they can make future decisions independently and without external help. True to the principle Design. Build. Run. Transfer. responsibility was gradually transferred to the company.
The basic idea was quite simple: the results belong to the company, not the consultant.
Results & successes
More efficiency, lower costs: the benefits of a lean IT landscape
The structured approach made it possible to achieve considerable savings. Within two and a half years, 250 million euros were saved, including 25 million euros in the first six months. The number of applications was reduced by 40 percent, making the IT landscape significantly leaner and more efficient. The introduction of a central Governance-The new structure made IT management easier and ensured that future investments were made strategically. In addition, the savings freed up funds amounting to 200 million euros, which could be used for strategic digitalization projects.
1
Cost savings
2
Simplified IT landscape
3
Strengthened governance
4
Strategic empowerment
Lessons Learned
In complex organizations, it is not perfection that makes the difference – but speed. Because where many structures come together, losing time quickly becomes the most expensive factor. If you want to create real transparency about your IT landscape, you need the courage to be uncomfortable. In many cases, clarity means questioning familiar structures – and therefore not making yourself popular everywhere.
Transformation is rarely a purely technical undertaking. All too often, even excellent solutions fail not because they cannot be implemented, but because of internal politics. This makes it all the more important to have leadership that convinces through commitment and orientation – not through discussions without consequences.
Governance cannot be drawn in boxes on an organizational chart. It lives in the mindset of the organization, is reflected in daily behavior, decisions and priorities. If external consultants mainly produce slides instead of driving decisions forward, then the actual goal is being missed.
Taking an honest look at your own IT often means discovering unpleasant truths – such as how much you have blocked yourself over the years. But this is where real transformation begins: with radical honesty. And it only ends when the organization is able to steer itself. Everything in between is leadership work – not slide work.
Why consultingheads
The optimization of the IT portfolio of this leading automobile manufacturer illustrates how important it is to rely on the right experts at the right time - and this is exactly where consultingheads comes into play.
Speed and precision. We know that time is often the decisive factor for the success of a project. That’s why we provide you with tailor-made profiles of independent consultants, freelance experts and interim managers within 36 hours – hand-picked and tailored to your specific requirements.
Expertise and international network on-demand. Thanks to our global network of highly qualified consultants with a deep understanding of the industry and a proven track record, we can find exactly the right experts to understand your challenges and tackle them in a targeted manner. This diversity of international experience enables us to staff even complex projects with the necessary cultural and technical expertise – always available and precisely tailored to your requirements. Niklas Scipio is a perfect example of this: a consultant with experience in optimizing global IT landscapes and a deep understanding of the requirements of both companies and private equity investors.
Project-based staffing with flexible, hybrid team structures. Instead of relying on permanent teams, consultingheads offers the opportunity to deploy experts from a broad network as required. By combining internal and external resources, we create customized solutions that optimally staff each project phase. This flexibility ensures that precisely the expertise required for the success of a program is integrated – without the restrictions of rigid team structures.
Results-oriented instead of overhead-driven. With consultingheads, companies get access to first-class consulting without the high overheads of traditional consulting firms. Our business model is designed to ensure maximum efficiency – so that your budgets flow directly into implementation and not into costly overhead structures.
Value on personal fit. We not only look at the technical aspects, but also attach particular importance to the personality and working methods of our experts. After all, the success of a project depends largely on how well the team works together.
Results that convince. Just as in this case study, sustainable savings of 250 million euros were achieved by optimizing the IT portfolio, we also attach great importance to solutions that deliver immediately measurable results – without detours and with maximum efficiency.
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