IT Budget Archive | OTRS

How to Achieve 2026 Budget Targets with Data-Driven ITSM

Laura Diral — Thu, 08 Jan 2026 09:33:32 +0000

How to Achieve 2026 Budget Targets with Data-Driven ITSM

2026-01-08
Laura Diral

IT Budget

As organizations enter 2026, IT leaders face a familiar but increasingly pressing challenge: meeting business expectations, while operating under tighter financial constraints.

Cost sensitivity is rising across industries and IT budgets are under closer scrutiny than ever. At the same time, IT environments continue to grow in complexity, shaped by hybrid work, security requirements and higher service expectations from users.

This makes the beginning of the year a critical moment. Budget decisions made now will define how effectively IT can support the business over the coming months. Achieving budget targets is all about investing wisely and clearly demonstrating value. Data-driven IT service management (ITSM) plays a central role in this shift by turning operational insight into budget-relevant outcomes.

Why IT budgeting matters more than ever

Before budgets can deliver value, there needs to be clarity on what IT budgeting is meant to achieve. A well-structured IT budget is a management framework that supports planning, alignment and accountability across the organization.

At the start of a new budget cycle, IT budgeting serves several critical purposes:

1. Cost management and control

Budgeting provides visibility into IT spending and helps ensure costs remain within agreed limits. This is increasingly important as spending shifts toward subscriptions, cloud services and external providers.

2. Informed decision making

A clear budget enables IT teams to evaluate priorities and make trade-offs based on available funding and expected impact rather than reacting to issues as they arise.

3. Effective resource allocation

Budget planning helps ensure that funding supports core IT operations while focusing effort on areas with the greatest potential business value.

4. Project funding and modernization

Planned budgets enable investment in technology refreshes, addressing technical debt and strengthening cybersecurity instead of deferring critical initiatives.

5. Improved communication and alignment

A defined budget creates transparency between IT, finance and business teams and aligns expectations when planning projects or changes.

6. Risk management

Budget visibility helps identify underfunded areas that may increase operational, security or compliance risks over time.

7. Performance measurement and outcomes

Comparing planned budgets with actual spending allows organizations to evaluate IT performance and improve financial effectiveness year over year.

Without this foundation, even well-intentioned IT initiatives struggle to demonstrate impact or secure ongoing investment.

From budgeting principles to best practices

To move from principles to execution, IT leaders need a practical framework. Defining a clear IT budget that aligns with business objectives requires more than estimating costs or negotiating line items. It calls for proven best practices that connect financial planning with service delivery, operational efficiency and long-term value.

The following sections outline how organizations can structure their budgeting approach, evaluate investments realistically and use ITSM to translate strategic goals into measurable, budget-relevant outcomes.

Best Practice #1: Start budgeting with total cost of ownership in mind

One of the most common pitfalls in IT budgeting is focusing too narrowly on upfront costs. For ITSM in particular, license prices alone rarely reflect the true financial impact of a solution.

A best-practice approach starts with total cost of ownership (TCO). TCO includes acquisition costs as well as implementation effort, time to go live, required internal resources, integration complexity, scalability and ongoing operational overhead.

Solutions that appear affordable at first can become expensive if they require long deployment phases, heavy customization or continued reliance on external support. By contrast, ITSM platforms that enable fast go-live, efficient workflows and gradual optimization often deliver significantly lower costs over their lifecycle.

Platforms like OTRS are designed with total cost of ownership in mind, combining fast deployment, low operational overhead, and a licensing model that avoids linear cost increases as service demand grows.

Introducing TCO early in the budgeting process shifts discussions away from short-term savings toward sustainable value and provides a more realistic basis for evaluating ITSM investments.

Best Practice #2: Connect budgeting with service management

Modern IT budgeting increasingly focuses on outcomes rather than line items. This shift makes structured service management essential. Without visibility, consistency and measurable results, budgets remain theoretical and difficult to defend.

ITSM provides the processes and data needed to connect daily IT operations with financial outcomes. It allows IT teams to move beyond explaining what they spend money on and start demonstrating what the organization gains in return.

By embedding budgeting considerations into ITSM practices, organizations can better align service performance with financial planning and business priorities. This connection is easier to establish when ITSM platforms provide built-in reporting, transparent cost drivers, and processes that are easy to adapt to business needs, as seen in solutions like OTRS.

Best Practice #3: Use data-driven ITSM to change the budget conversation

Traditional IT reporting often centers on activity metrics such as ticket volumes or response times. While operationally useful, these figures rarely resonate with budget holders.

Data-driven ITSM enables a more meaningful conversation by linking service data to budget-relevant questions:

Where are time and resources being consumed inefficiently?
Which recurring issues generate the highest costs?
How does IT performance influence employee productivity?

When IT teams can answer these questions with reliable data, they can demonstrate how service improvements directly support financial goals rather than simply requesting additional budget.

OTRS supports this shift by making service data accessible and actionable, enabling IT teams to translate operational metrics into insights that resonate with financial and business stakeholders.

Best Practice #4: Improve agent productivity before adding headcount

One of the most effective ways to protect IT budgets is to maximize the productivity of existing teams. Skills shortages and hiring challenges make headcount increases costly and uncertain.

Data-driven ITSM supports productivity by centralizing service requests, assets, workflows and knowledge. Automation, clear prioritization and standardized processes reduce manual effort and enable agents to resolve issues faster and more consistently.

From a budgeting perspective, this has a direct impact. Higher productivity reduces backlog, overtime and escalation rates while limiting the need for temporary or external staff. In many cases, improving productivity delivers a stronger return than expanding teams.

Best Practice #5: Reduce dependency on expensive external resources

External services often represent a hidden drain on IT budgets. Consultants, outsourced support or ad hoc assistance are frequently used to compensate for limited visibility or inefficient processes.

Data-driven ITSM helps organizations regain control by making recurring problems and inefficiencies visible. Reporting and analysis functions highlight patterns that allow IT teams to address root causes rather than repeatedly paying for external fixes.

Over time, this leads to more predictable costs, stronger internal capabilities and improved budget stability.

Best Practice #6: Base budget decisions on clear, simple overviews

Reliable budgeting depends on reliable data. Yet many organizations still rely on fragmented tools or spreadsheets when planning IT investments.

ITSM platforms provide clear overviews of service performance, workload distribution and asset usage. These insights do not need to be complex to be effective. Even straightforward dashboards can reveal trends that support better financial decisions.

Understanding which services generate the most demand, where assets are underused, or which processes consume the most effort helps align spending with actual needs rather than assumptions.

Best Practice #7: Apply AI selectively to strengthen ROI

AI is increasingly part of IT budget discussions, but its value depends on practical application. A best-practice approach focuses on use cases that deliver immediate, measurable benefits.

Within data-driven ITSM, AI can support tasks such as ticket classification, trend analysis, or knowledge assistance. These capabilities reduce manual effort and improve consistency without requiring large-scale transformation projects.

OTRS supports a pragmatic approach to AI by enabling flexible integration of AI services where they deliver clear value, without forcing organizations into rigid or one-size-fits-all models.

When AI is integrated flexibly and aligned with existing ITSM processes, it strengthens the ROI case instead of adding complexity or uncertainty.

Best Practice #8: Align ITSM with long-term budget goals

Data-driven ITSM is not a one-time initiative. It is a continuous framework that supports better budgeting year after year. By linking service performance with financial outcomes, IT teams become active contributors to business planning rather than perceived cost centers.

This alignment enables organizations to respond more confidently to budget pressure, adjust priorities as conditions change, and demonstrate value in a language business stakeholders understand.

Conclusion: Turning budget pressure into opportunity

Meeting 2026 budget targets does not require cutting services or delaying modernization. It requires clarity, discipline and the ability to connect investment with outcomes.

By applying IT budgeting best practices and using data-driven ITSM to improve productivity, reduce unnecessary costs, and support informed decisions, organizations can turn budget pressure into an opportunity. In a cost-sensitive environment, this approach is not optional: it is essential.

Laura Diral

IT Budget

Self-Service Portal: ROI and Benefits

Tobias Kortas — Fri, 28 Nov 2025 09:44:24 +0000

Self-Service Portal: ROI and Benefits

2025-11-28
Tobias Kortas

Customer Service, IT Budget

Self-service is commonly regarded as a lifesaver for IT departments and their service desks that are under pressure from both time and budget constraints. As part of a strategy to improve resolution times, reduce costs, or enhance the end-user experience and customer satisfaction, this makes complete sense.

These three points are among the frequently cited, overarching benefits of self-service. In this article, we take a closer look at the broader spectrum of self-service benefits, the associated return on investment (ROI), and how to best achieve it.

The Benefits of Self-Service

Self-service portals offer a wide range of benefits, including:

#1 Cost Savings and Increased Efficiency

IT reduces costs and speeds up request resolution by enabling end users through self-help automations or “shift-left” to take on tasks that were previously handled by the service desk.

#2 Improved Customer- and Employee-Oriented Experience

Today’s customers and employees have certain expectations regarding the accessibility of communication channels. Self-service offerings complement this spectrum and lead to low-barrier support experiences.

For IT departments, this means users now expect self-service options in the workplace, including ticket creation, IT service catalogs, and knowledge bases, as well as anytime, location-independent access from any device.

#3 Greater Support Availability

Self-service can be used to provide 24/7 support, at least for all cases that users can realistically resolve on their own. For more complex matters, self-service can at least provide an important starting point.

The potential of self-service becomes particularly striking when it is offered in multiple languages and time zones: this generates significantly lower costs than hiring native-speaking support staff to cover these cases.

#4 Relief for Overburdened Service Desks

A self-service portal diverts calls away from the phone channel, which can greatly reduce the workload of the IT service desk. Support staff can process self-service tickets during less intensive periods provided that priorities and Service Level Agreements (SLAs) permit this. This also contributes to cost savings because staffing needs become more balanced, meaning peaks and fluctuations in ticket volume decrease.

All these benefits positively influence the IT service desk, end users, and the organization as a whole. However, it’s important to understand that these advantages only materialize if self-service usage is high enough to make a meaningful difference in daily operations.

#5 Additional Support Through AI

Many applications leverage the advantages of artificial intelligence (AI), thereby increasing the value and thus the ROI of a self-service portal. Typically, AI chatbots answer questions, refer users to helpful resources, and provide guidance.

Moreover, AI-supported knowledge bases make accessing information even easier, with modern features such as AI translations facilitating multilingual use.

Realizing the ROI of Self-Service

In the past, achieving the desired ROI from self-service was difficult, mainly because it was often implemented insufficiently. In short: many users were not properly aware of the offerings or were unable to use them effectively.

Today, however, the situation looks different: there are now many initiatives to raise awareness of these offerings, as well as advanced ways to implement self-service. This creates new opportunities to unlock the full potential of a self-service portal.

Key ROI drivers, self-service components with particularly high value, include:

Detailed knowledge bases with Knowledge Base Articles (KBA) and thorough instructions
Clear, centrally accessible answers to frequently asked questions (FAQs)
Low-barrier AI chatbots that answer questions instantly

Conclusion: Once an organization sufficiently explores self-service portals, their capabilities, and the user perspective, ROI can typically be achieved quickly.

Calculating the ROI of Self-Service

What matters most: The success of self-service is absolutely achievable, and companies are increasingly investing in this success. There is no doubt that self-service plays a major role in the present and future of IT support. But how can your company justify the initial or additional investment?

While all the benefits mentioned above are important, most business cases focus on measurable, quantitative advantages – especially financial savings.

Two aspects are particularly important:

What are the realistic average costs per ticket?
How much can these costs be reduced through a self-service portal?

“Cost per Ticket”

A commonly used ITSM KPI is the so-called Cost per Ticket (CPT). This refers to the average cost an organization incurs for processing a single ticket.

All operational expenses are considered, including personnel, license costs, infrastructure, etc. This total is then divided by the number of tickets resolved in the corresponding period.

Cost per Ticket: Total service desk costs / total number of resolved tickets

Note: Costs per ticket can vary significantly depending on the ticket type. Incidents (e.g., simple desktop support) are typically cheaper than complex service requests or problem resolutions.

Calculating Savings / Saving Potential Through Self-Service

The simplest way to determine the (potential) ROI of a self-service portal is to calculate the monthly gross savings: multiply the expected number of tickets that will be deflected by self-service by the average savings per ticket.

This is not an exact science, but it provides at least an indication of the monthly saving potential. These savings can then be compared against the one-time and ongoing costs of the self-service solution to calculate the ROI. If necessary, a payback period analysis can also be performed.

Information You Will Need

To do this, you need:

The total number of tickets your service desk handles per month
A realistic estimate of what percentage can be deflected by self-service
Ticket costs per unit (or use the industry averages listed below)
Known one-time and ongoing self-service costs
(Note: Since self-service capabilities are often already included in modern ITSM platforms, some costs may instead reflect optimizing your ITSM investment.)

Average Costs

According to MetricNet, the following average costs apply:

Self-help (Level 0) – 2 USD
Service Desk (Level 1) – 22 USD
Desktop Support – 69 USD
IT Support (Level 2) – 104 USD

Since these values date back to 2017, they should be used with caution. However, they still provide a reasonable impression of how costs increase significantly with each service level.

Above all, they clearly illustrate the savings potential of a well-designed self-service portal. In this example, each request resolved through self-help instead of the service desk saves 20 USD, typically the case for a password reset.

Conclusion: High Savings Potential

Clients who still require support staff after using self-help are generally better prepared and therefore also incur lower costs.

Note: In general, cost per ticket fluctuates significantly and can vary greatly by case. Particularly extreme outliers – fairly high costs for individual tickets – highlight how valuable a self-service portal truly is.

The more tickets (and related support effort) are shifted to self-service, the cheaper they are to resolve. An important goal of self-service is therefore to relieve service and support staff, especially in simple and recurring cases. This saves time, reduces stress, and lowers costs, meaning a positive ROI is within reach.

Conclusion

Self-service clearly offers significant financial advantages for organizations. However, this requires implementing a suitable portal effectively and ensuring that clients, both customers and employees, become thoroughly familiar with it.

In addition to the obvious financial benefits, self-service also provides productivity and end-user satisfaction advantages that should not be underestimated. A happy, productive workforce is vital for any company and self-service plays a crucial role in this.

Equally important is a satisfied customer base, which pays off in the medium and long term not only through “hard” metrics such as customer retention rate (CRR), upselling, or acquiring new customers based on referrals.

Tobias Kortas

Customer Service, IT Budget

IT Budget: Status Quo for Companies and Outlook

Tobias Kortas — Wed, 26 Nov 2025 08:39:44 +0000

IT Budget: Status Quo for Companies and Outlook

2025-11-26
Tobias Kortas

IT Budget

What truly determines success in IT is the way companies use the budget available to them. Certainly: Many organizations are currently feeling increasing budget pressure due to the tense situation in the global market.

For IT leaders, this often means working with a smaller budget. Their task is now to use it as intelligently and purposefully as possible.

This does not necessarily mean a radical cost-cutting course, but with foresight can also include sensible investments when an adequate return on investment (ROI) is in sight. It is a small paradox: the benefit factor ultimately saves much more than the savings that would have been achieved, for example, by forgoing the right software solution.

This article examines the financial situation in which especially small and medium-sized enterprises (SMEs) find themselves (and will find themselves), and how they can best deal with it.

IT Budget: The Current Framework

Organizations often face the challenge of achieving as much as possible with a limited IT budget. Especially for small and medium-sized enterprises (SMEs), resources are often insufficient to invest on a large scale. This gives rise to the need to act skillfully and use the available budget in the right places.

Task: Achieving Improvements with Limited Budget

Increasing the resilience and performance of IT with little budget may seem like squaring the circle, but it is precisely the task IT leaders face. Advancing possibilities to integrate artificial intelligence (AI) and automation into processes help with this challenge, but at the same time demand new investments.

One thing is clear: Organizations can hardly avoid new IT expenditures if they want to maintain or even increase their competitiveness. In this situation, hardly any misstep seems permissible. Achieving an adequate ROI becomes a mandatory task.

Companies Act Cautiously

It is therefore unsurprising that many companies act hesitantly and shy away from investments. In our survey “The State of SMB IT for 2026”, 29 percent of IT professionals and leaders cite budget constraints as the main reason they do not use advanced ITSM, ITAM, and device management solutions — by far the most frequently named factor.

Likewise, budget constraints, at 40 percent, are tied with the lack of qualified staff as the biggest challenge in IT service delivery.

Outdated IT Infrastructures Lead to Investment Pressure

This means that outdated IT infrastructures and existing isolated systems are blocking progress. Instead of gradually moving into the technological fast lane, many small and medium-sized enterprises find themselves at a dead end. They are often all too aware that they need to modernize their IT infrastructure.

But internally, investment gaps and technological legacy issues prevent rapid advancement. As a result, they often remain reactive instead of being able to take a proactive role in shaping technological change.

This leads to the understandable realization that allowing oneself to fall behind technologically is possible, but by no means recommended: Many companies feel the investment pressure and want to generate higher strategic value with their IT.

Outlook

The question rightly arises as to how companies can achieve exactly that in 2026 and beyond and thereby contribute to overarching business goals. The path is clear: targeted modernization with measurable benefit must be pursued.

A radical overhaul, on the other hand, would exceed the scope, would not achieve the required changes in the short to medium term, and would not strengthen current practices. Thus, many companies now proceed iteratively and orient themselves toward the status quo. Continuous improvement is the logical path to take.

IT Security Is the Top Priority

The most important priority for most is improving IT security: 41 percent of surveyed SME representatives assign it the highest importance for 2026, followed by workflow automation (31 percent), the introduction of AI tools (30 percent), and increased employee productivity (29 percent).

This points to the manifold challenges of hybrid environments and data protection on the one hand, but also clearly to a performance orientation on the other. When companies invest, they expect clear improvements.

Companies Want to Invest More in Employees

It is noteworthy that not only tools, software solutions, and features are in focus, but also people: 27 percent of respondents consider employee training an important priority. This makes sense and shows foresight. After all, even the best software solutions have only limited impact if the employees responsible for them do not know them well enough or do not know how to unlock their full potential.

Fittingly, 62 percent of respondents see training and education as an important factor in improving their ITSM practices. This suggests that many employees are overwhelmed by tools and software or at least unable to fully exploit their potential.

Cost-Benefit Ratio: Efficiency Counts

A full 56 percent see easy-to-use AI and automation functions as the key to optimizing their ITSM practices. Additionally, 48 percent cite access to affordable software.

In summary, advanced, user-friendly solutions and features at manageable costs are required for employees to use them effectively. This is precisely the focus for 2026: a coherent cost-benefit ratio that moves companies forward. Ideally, tools are inexpensive, ruthlessly effective, and used by knowledgeable, well-trained employees who handle them skillfully.

Thus, efficiency becomes the decisive maxim: it consists of various components that, working together, can truly make a difference. Companies that want to make a decisive impact with their IT in 2026 must look at the big picture. Holistically and iteratively, IT can move forward even with a limited budget (more on this below).

Best Practices: The Path to Return on Investment (ROI)

Implementing a good, affordable software solution, introducing advanced AI and automation functions, and training employees effectively – in practice, though this is often not easy. Even if the direction is clear, decision-makers still face the question of how to use their often limited IT budget in 2026 as effectively as possible to achieve their goals.

The following are several helpful practices that support making the most effective use of the IT budget.

#1: Work with Your Own Maturity Level

When the IT budget is limited, good, granular approaches matter even more. For example, targeted and highly value-oriented ITSM can be best initiated when the IT team knows exactly where it stands and which steps it needs to take.

These insights are provided by a maturity assessment, which can be carried out quite easily. Based on various dimensions – such as processes, governance and strategy, or technology and tools – the next logical steps become clear to align ITSM with the achievement of relevant overarching business goals.

Once the decision to invest in a new software solution has been made on this basis, the path to a positive ROI becomes significantly easier.

#2: View IT Costs Holistically

Costs are not just costs. There are different cost factors and value drivers that together should result not in pure expenses but in investments with generous returns. When acquiring a software solution, many companies focus solely on the price. However, this is only part of the picture. Holistic concepts such as Total Cost of Ownership (TCO) are more suitable for providing clarity on all costs throughout the entire lifecycle. This is also the task of focused IT asset management.

Decision-makers should also examine the existing IT infrastructure with a cost- and value-oriented mindset and retire tools and applications that primarily cause costs and provide little value. For example, many companies unnecessarily pay for licenses that almost no one uses. On the other hand, fair models such as “Concurrent Agents” already provide significant cost advantages. In this model, companies pay only for as many agents as are working in the system at any given time.

#3: Implement AI Gradually and Based on Needs

Many companies are eager to keep pace with the AI revolution – a correct mindset. After all, our survey data also shows that AI functions matter more in 2026. However, with budget intelligence in mind, it is important not to launch a large-scale AI revolution within the company. Used indiscriminately, AI quickly becomes a pure cost factor that does not bring the expected efficiency gains.

Instead, the focus must be on where AI can make the biggest difference in IT operations. Primarily in these areas, corresponding applications can be used gradually and experimentally. For example, AI-based summaries in ticket systems can deliver enormous advantages, especially for extensive histories and conversations.

Flexible offerings such as booking individual AI services are an easy way to implement this incremental approach.

#4: Support Employees

Training as well as continuing education for employees are among the key factors currently prioritized by small and medium-sized enterprises. However, this area is highly individual: employees often need to apply knowledge in very specific ways and have very different needs regarding training initiatives.

Therefore, companies must accompany and support employees individually. This works when leaders determine together with employees which courses and training sessions are suitable and effective – for example through feedback, assessments, regular exchanges, or simply daily work life. Standard training for everyone only makes sense in broadly applied transitions.

#5: Automate Recurring Tasks as Much as Possible

Automation is also a prominent focus according to our “The State of SMB IT for 2026” report. Standard tasks that recur continuously consume a lot of time — often unnecessarily so. The major advantage: a few simple automations already provide significant time savings and productivity gains, which in turn improve the return on the IT budget used.

Automating individual workflows and setting up standard notifications are good first steps. Additionally, a targeted knowledge base with instructions, descriptions, and how-to articles can be built as an important resource for support cases. Furthermore, companies can strengthen self-service through measures such as integrating AI chatbots, user forums, or updated FAQ pages.

The central goal is always to relieve service and support staff so they can focus more on value-creating tasks with tangible benefits.

Conclusion: Investing Pays Off — Even With a Tight IT Budget

There is clearly budget pressure in IT. Small and medium-sized enterprises in particular must be thrifty. Instead of radical cost-cutting, carefully chosen investments are usually the better choice. When possible, companies should invest strategically, as this is the only way to remain competitive and cost-efficient in the medium and long term.

The calculation is simple: through smart selection – for example of software solutions and advanced features – a clearly positive return on investment (ROI) becomes apparent after a short time. Key indicators include employee productivity, performance improvements, customer satisfaction, or the degree of automation achieved. This allows teams to accomplish a lot even with relatively small manpower and gain substantial time savings, especially in IT support.

Learn how you can get more out of your IT budget with OTRS software solutions.

Tobias Kortas

IT Budget

How to Achieve a Positive ROI in ITSM/ESM

Tobias Kortas — Fri, 26 Sep 2025 07:57:10 +0000

How to Achieve a Positive ROI in ITSM/ESM

2025-09-26
Tobias Kortas

IT Budget

Companies are under cost pressure: this is especially true today, but it has always been the case. Smart business management means ensuring that expenses pay off and deliver a positive return on investment (ROI) within a foreseeable time frame.

The same applies to IT budgets: organizations should benefit more from software solutions than they spend on them. Factors such as significant efficiency gains, quality improvements, or higher customer satisfaction are among the clearest indicators of a positive ROI. Even small time savings, more clarity for employees, or slightly better structures can already make a big difference.

This article explains how to reliably achieve ROI in IT Service Management (ITSM) and Enterprise Service Management (ESM).

Payback in Software Investments

Saving money leaves reserves. But those who don’t invest also miss out on profit opportunities. Many organizations with limited IT budgets therefore face tough decisions: Should they accept investment costs or save money and thereby miss out on potential gains such as productivity increases, higher efficiency, or improved customer satisfaction?

It’s easy to choose the former when the benefits are clear. The real challenge, however, is that many prospective buyers don’t know how to use software to its full potential – and often apply it only in very limited ways. Those who know how to use it effectively, on the other hand, can expect relatively fast payback.

The basic prerequisite for achieving a positive ROI is therefore to carefully explore the possibilities a software solution offers.

Why ROI Is Such a Key Metric

Return on Investment (ROI) measures the profitability of investments – data-driven and value-oriented. In IT or software decisions, it helps compare different options, make informed choices, and allocate available resources in a targeted way.

While qualitative benefits are important, most business cases require measurable, quantitative outcomes with a focus on financial returns. For example, a modern, intuitive user interface can only serve as a valid element of decision-making once its (financial) benefits can be quantified.

Sample ROI Calculation: Implementing a Ticketing System

A ticketing system offers organizations a range of advantages such as centralized information flow, automation, and service optimization. These are all valuable benefits, but they only become truly meaningful once translated into financial terms.

In practice, multiple factors come into play here – for instance, the financial equivalent of a 10% increase in customer satisfaction.

To illustrate, let’s stick to a simple example:

Costs: License + Implementation + Training = €50,000 in the first year
Benefits: Through automation, support employees save 200 hours per month. At an average hourly rate of €35 (including full costs), that amounts to €84,000 per year.

ROI = (84,000 – 50,000) / 50,000 = 68%

In this case, the investment would clearly pay off, with amortization within the first year.

Tips for More Accurate ROI Calculations in ITSM/ESM

While the above example is simplified, it already provides a useful ROI estimate. For more precision, organizations should consider:

1. Total Cost of Ownership (TCO)

A more accurate approach involves concepts like TCO, which includes indirect costs, operating costs, and end-of-life expenses to provide a holistic view.

2. Maturity Level

The profitability of software also depends on the maturity of existing processes. A maturity assessment reveals where optimizations and professionalization will pay off most. Running such an assessment before calculating ROI can be highly beneficial.

3. Direct and Indirect Savings

Software benefits are not only direct – such as labor-hour savings or reduced ticket volume – but also indirect, like opportunity creation, better customer experience, or higher employee satisfaction.

Software can also indirectly influence hard metrics, such as customer churn rates, by enabling faster and better ITSM services.

4. Multiple Benefit Factors

To achieve accurate ROI calculations, include:

A realistic cost base such as TCO
Full employee costs (including social contributions, infrastructure, etc.)
Differentiated benefits:
1. Hard savings: labor hours, errors, downtime
2. Soft savings: customer satisfaction, response times, compliance

5. Additional Recommendations

Run different scenarios – conservative, realistic, and optimistic. Decision-makers may also define a time horizon; three years is usually long enough yet still manageable.

As an additional ROI indicator, a payback period can be helpful. It shows how long it will take for the investment to pay for itself. This figure – e.g., “payback after 16 months” – is often more tangible than ROI alone.

Self-Service Portals: A Key ROI Factor

There are many ways to financially benefit from well-implemented ITSM and ESM – including the extension of ESM to non-IT departments.

One of the most direct ROI examples is the introduction of a self-service portal. Such a portal reduces the workload of customer support by lowering the number of tickets and requests to process.

In short: by enabling end users to handle tasks previously managed by the service desk, organizations reduce costs while also delivering faster problem resolution. This improves satisfaction, which in turn has indirect financial benefits.

Calculating ROI for Self-Service Portals

To calculate ROI for a self-service portal, you need:

The total number of monthly service desk tickets

A realistic estimate of how many tickets can be deflected via self-service

The average handling cost per ticket

The initial and ongoing costs for self-service

Note: Since self-service functionality is often included in modern ITSM platforms, some costs may count as optimization of existing investments.

This type of calculation provides quick insights, but also reduces complexity. A holistic view – including indirect and qualitative factors – is always recommended.

AI as an ROI Driver

There are many factors that drive a high ROI. Even small productivity gains of just a few percentage points can have a major impact.

However, beyond self-service portals, AI applications and automation exert the strongest and most direct influence, as they eliminate many manual steps. With the right AI support, employees also gain rapid, well-founded insights, leading to better outcomes.

Key AI applications that serve as ROI drivers include:

Ticket summarization

Ticket classification and service descriptions

Automated response generation

Real-time translations

Sentiment analysis

Conclusion: ROI – One (Important) Part of the Truth

Investments must pay off – this principle applies to IT Service Management (ITSM) and Enterprise Service Management (ESM) just as it does in general business. Especially with limited budgets and the need to invest wisely, ROI serves as a key metric that provides valuable guidance.

Decision-makers, however, should keep in mind that ROI represents only part of the picture. Additional indicators such as the payback period, results from a maturity assessment (easy and quick to conduct), or qualitative, non-quantifiable factors also contribute to the full evaluation.

Tobias Kortas

IT Budget

Total Cost of Ownership (TCO): Reducing IT Costs in a Sustainable Way

Author OTRS — Thu, 04 Sep 2025 08:20:53 +0000

Total Cost of Ownership (TCO): Reducing IT Costs in a Sustainable Way

2025-09-04
Author OTRS

ESM, IT Budget

Achieving more with fewer resources is the mandate. Yet, IT leaders in every organization must successfully and competitively manage the company’s technological infrastructure.

Cloud migrations are becoming more important. Companies are also digitalizing many departments. The demands and costs are high. They seek different software tools, solutions, and other IT components.

At first, it might seem enough to look only at direct expenses. These include software licenses and hardware costs. However, true cost efficiency comes from a more complex idea: the Total Cost of Ownership (TCO).

This article explains the idea of TCO. It shows how to consider it effectively. It also demonstrates how Enterprise Service Management (ESM) can help lower IT costs. This approach can provide a good return on investment (ROI).

What is TCO?

Total Cost of Ownership (TCO) is a financial calculation. It looks at both the direct and indirect costs of a product or service.In IT, this includes the purchase price of software, hardware, or services. It also covers costs for implementation, operation, maintenance, and decommissioning.

It is the result of a cost of ownership analysis. To calculate TCO in the IT environment consider:

Acquisition and implementation costs: the initial purchase price, licenses, hardware purchase, configuration, and installations
Operating costs: personnel costs, training, updates, support, security, energy consumption
Indirect costs: downtime, inefficiencies, vendor lock-in, scalability limits
End-of-life costs: migration, disposal, data decommissioning

TCO provides a holistic view on the lifecycle of an IT investment—far beyond the initial costs.

This perspective is crucial, especially in complex environments where services affect multiple departments and platforms.

Why is TCO important?

Understanding the concept of Total Cost of Ownership proves extremely beneficial for companies for several reasons.

Here are the key advantages at a glance:

It enables clear purchasing decisions.
Companies avoid hidden costs.
The IT budget can be used and built up sustainably. Planning reliability emerges.
Based on TCO, it becomes possible to realistically compare vendor offerings.

A solution that seems cheap at first can become expensive later. This can happen because of high maintenance needs or poor integration options.

On the other hand, companies that invest in Enterprise Service Management (ESM) platforms can save money over time. They do this by improving or automating processes and combining old and new tools.

Best Practices: Saving IT Costs with TCO

Identifying and managing TCO requires a proactive, strategic approach. With the following best practices, this becomes possible.

#1: Develop a holistic view of IT investments

TCO is not just a matter for the finance department or IT. CIOs, IT managers, service owners, vendors, and procurement officers must jointly evaluate the long-term impact of each investment.

The central questions—beyond acquisition and implementation costs—are as follows:

What training and support effort does the tool require?
How much manual maintenance is necessary?
Can the tool be integrated into existing platforms?
What are the potential costs of scaling?

#2: Always align with business objectives

Technology expenses should always be linked to business outcomes and key metrics. For example, if a new platform cuts ticket processing time by 50%, it shows a clear productivity gain. This is an important part of the TCO-ROI comparison.

Conversely, if metrics such as productivity or the Customer Satisfaction Score (CSAT) only rise moderately, this has a positive impact. This is true even if the TCO is moderately high. This is because improvements in key business data represent enormous financial value.

#3: Break down silos and centralize services with ESM

Enterprise Service Management (ESM) takes the ideas of IT Service Management (ITSM) and applies them to the whole organization. This includes areas like HR, finance, infrastructure, and legal.

This enables the following:

Companies save money on duplicate service tools.
Workflows, automations, and reports are centralized.
Duplicate work between departments is avoided.
By applying best practices in different departments, their positive effects are amplified. Services are holistically improved.

A unified ESM platform significantly lowers operating costs and long-term expenses, thus reducing the company’s overall TCO.

#4: Use automation and self-service

Too many manual processes—for repetitive and non-value-adding tasks—are costly, error-prone, and slow.

Those who want to work more efficiently can reduce this effort through the following factors:

ESM platforms that support these functionalities not only increase user satisfaction but also lower personnel costs. This is an an important component of TCO.

#5: Continuously monitor and optimize

Tools for monitoring performance, SLAs, and usage metrics help allocate resources optimally and avoid overcapacity. ESM platforms offer robust analytics and reporting capabilities that enable data-driven decisions for cost reduction.

Proof of Concept: Technology decisions impact TCO and ROI

Let’s look at two scenarios in service management: classic ITSM solutions versus an ESM platform with automation and self-service.

1. Isolated, fragmented ITSM solutions

Using individual ITSM tools may initially appear attractive due to lower license costs. But when you add implementation, ongoing maintenance, support contracts, specialized staff, and integrations, total costs quickly rise. Operational effort also increases. More resources are needed to maintain workflows and handle support requests.

2. ESM platform with automation and self-service

An ESM platform needs more money at first. However, this cost is quickly balanced by automations, easy self-service features, and built-in integrations.These save manual effort, ensure efficient workflows, and reduce staffing needs. This drastically lowers costs in the long run—the financial benefits multiply.

Meanwhile, support and maintenance are usually simple and included in the pricing package. For this reason, the cost-benefit equation is extremely positive in the long term.

Result: ESM creates sustainable savings and tremendous added value. In the long run, ESM ensures a lower TCO, fewer external dependencies, reduced complexity, and the elimination of isolated tools.

Organizations benefit from efficiency, faster solutions, and higher satisfaction through self-service and automation.

The TCO calculation often shows a paradox. Tools that seem cheap can actually be very costly. Alternatives with higher initial costs can turn out to be a financial blessing.

TCO as a strategic lever

In a complex digital world with tight budgets, TCO helps assess technologies. It looks at all real and long-term costs, not just the purchase price.

This makes hidden operating costs, maintenance obligations, and inefficiencies visible. It provides a more complete picture for investment decisions.

By looking at TCO from the start and during the whole life cycle, we can make better decisions and meet budget goals. The goal is not just to reduce costs, but to make intelligent, sustainable investments with measurable added value.

Why is OTRS worthwhile from a TCO perspective

OTRS has a Concurrent Agents model. Customers only pay for the number of agents logged in at the same time.

For example, a company has 30 agents. However, only ten agents are logged in during a shift. The license costs only apply to those ten agents.

OTRS customers enjoy wide service coverage. They also get complete maintenance and improvements, like bug fixes and updates. Plus, they benefit from high security.

In a managed environment like the cloud, customers get full service. They do not have to pay for servers or updates.

Without unnecessary and hidden costs, the financial added value is accordingly high. Customers already benefit extensively from OTRS with the first hints of productivity gains and these tend to increase over time.

The Saxony State Office for Schools and Education (LaSuB) gets support that is two-thirds faster for 32,000 teachers. They have significantly increased efficiency.

Conclusion: From intelligent cost control to real growth

Total Cost of Ownership (TCO) is an important idea. It changes the focus from short-term savings to long-term cost savings. This is an intelligent, sustainable, and future-oriented concept. It should always play a role in decisions regarding IT and service investments.

Those who only look at upfront costs risk fragmented tools, inefficiencies, and unexpected expenses. Focusing on the lowest possible TCO helps cut costs. This leads to real efficiency and lasting value.

Enterprise Service Management (ESM) is important because it turns TCO insights into real actions. It does this by using structure, standardization, and automation.

Ultimately, TCO fosters a culture of planning, transparency, and continuous improvement. It provides a framework for fairly comparing options, setting priorities based on holistic impact, and realistically forecasting future requirements.

Thus, cost control becomes a growth path—with potential that goes far beyond initial expectations.

Author OTRS

ESM, IT Budget