Cloud & Infrastructure · IT Cost Optimization · Medium · 25-35 min

Cutting 15% From the IT Budget

Cutting 15% From the IT Budget is a medium Cloud & Infrastructure it cost optimization case interview that runs 25-35 min. A financial-services firm's IT budget has grown to $300M, roughly 8% of revenue and well above the 5% peer benchmark. A strong answer works through 5 phases: Segment the $300M into run vs mandatory vs discretionary before cutting anything; Protect regulatory and security-critical spend; Find savings in run cost; Prioritize discretionary projects by value, killing or deferring the low-return ones; Land a credible path to 15% with the buckets it comes from and the risks of going too far.

Last updated 2026-09-05

The brief

A financial-services firm's IT budget has grown to $300M, roughly 8% of revenue and well above the 5% peer benchmark. A new CFO wants 15% out within a year without harming regulatory-critical systems or the digital roadmap. Spend splits roughly: 55% run/maintenance, 25% mandatory/regulatory projects, 20% discretionary change. You lead the rationalization.

How to approach it

  1. Segment the $300M into run vs mandatory vs discretionary before cutting anything
  2. Protect regulatory and security-critical spend — name what is off-limits and why
  3. Find savings in run cost — vendor consolidation, license true-ups, cloud rightsizing, infrastructure simplification
  4. Prioritize discretionary projects by value, killing or deferring the low-return ones
  5. Land a credible path to 15% with the buckets it comes from and the risks of going too far

What a strong answer does

  • Builds savings bottom-up by spend category rather than an across-the-board percentage cut
  • Explicitly ring-fences regulatory and cybersecurity spend
  • Goes after run-cost waste (licenses, vendors, over-provisioning) before cutting change projects
  • Recognizes that deferring change spend has a future cost / opportunity cost
  • States where 15% gets risky and what the trade-offs are

Red flags interviewers score down

  • Applies a flat 15% cut to every line including regulatory systems
  • Cuts the digital roadmap first because it's 'discretionary' without assessing value
  • Ignores quick wins in licensing and vendor consolidation
  • Promises 15% with no breakdown of where it comes from

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