Early last year, Morgan Stanley reported that "operational efficiency” was mentioned on U.S. companies’ earnings calls at a record rate. As a result, companies in 2024 raced to find ways to cut costs, trim waste, and do more with less. In Q1 of 2025, Eliassen Group surveyed 1,000 U.S. technology professionals in our 2025 Technology Leadership Pulse Survey, resulting in two key data points that reveal any efficiency gains that may have been made last year weren’t quite enough to offset ongoing inflation and other economic challenges:
- First, despite a year spent focusing on operational efficiency, tech budgets aren’t growing at nearly the same rate they once were. More than half (58%) of tech leaders surveyed said they expect budgets to increase moderately in 2025, compared to just 36% last year. Meanwhile, just 11% said they expect their budgets to increase significantly, down from 37% in 2024.
- Second, 15.5% of tech leaders in last year’s survey said that improving processes and operational efficiencies was a key focus for 2024. In 2025, that number actually ticked up to 17%, making operational efficiency the year’s second-highest priority behind AI.
With budgets cooling off and global economic uncertainty lingering, it’s clear that organizations across the board are looking for ways to get more out of their teams and technologies. But getting more doesn’t have to mean more work, more hours — or even more employee turnover. These smart strategies can help your team deliver efficiency gains without toppling your budget goals.
What Does Operational Efficiency Mean in 2025?
Once, “operational efficiency” simply meant getting the most output from the fewest inputs. That basic definition still stands, but today’s leading organizations take a broader view. Instead of simply focusing on cost reduction, they focus on resource optimization for the purposes of delivering maximum strategic value, minimizing waste, and maintaining or improving quality.
In other words, it’s not just about doing more with less: It’s about delivering on the organization’s goals without sacrificing quality or adding unnecessary resources and costs.
To achieve those ends, technology leaders will have to do more than just eliminate waste. They’ll also have to empower their teams to deliver better outcomes — and that often means finding innovative ways to leverage technology, partners, and even other leaders.
How Technology Leaders Can Improve Operational Efficiency in 2025
Align on Efficiency Across the Enterprise
When executives call for gains in efficiency, team leaders inevitably implement policies to improve it and KPIs to track it. But when each team or function has a different definition of “operational efficiency,” disconnects and breakdowns occur.
Instead of leaving it up to each function to determine what “operational efficiency” means, technology leaders can use their seat at the table to help the organization align on crucial operational elements, like:
- KPIs that measure efficiency: Metrics like transaction costs, cycle times, resource utilization rates, and more are ideal for establishing what exactly your organization means by “efficiency.”
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- Consider using “SMART” (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals to establish a clear framework for what you want to achieve, how, by when, and with what resources.
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- Example: “By Q4 2025, reduce order processing time by 12% through use of automated workflows in order to improve average delivery times by four days.”
- Regular reporting to ensure accountability: Setting metrics is a great start, but they may have little value if progress against them isn’t regularly measured. Monthly or quarterly reporting at a team or functional level can shed light on areas where more improvement is needed, and they can provide a valuable outlet for sharing best practices and wins.
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- When goals are missed, consider “blameless retrospectives” to understand and remedy points of failure, rather than simply assigning blame. Companies from Atlassian to Google to Etsy use these regularly to improve efficiency and operational excellence.
- Outcomes for the workforce, not just the bottom line: Efficiency improvements can deliver a variety of wins for the company, but how do those wins translate to the workforce? Look for ways to reward top contributors — and don’t be limited to monetary incentives. Given today’s tighter budgets, options like peer recognition and career development opportunities can often be just as impactful when it comes to motivating teams to achieve greater efficiency.
Get More From Your Budget by Eliminating Sprawl
Inflation may have slowed somewhat in 2025, but it’s still a factor — and alongside global economic volatility and ongoing economic uncertainty, it’s continuing to drive prices up on everything from technology licenses to services to real estate.
With this mind, one way leaders can improve efficiency is by undertaking a comprehensive audit of software licenses and contracts and then trimming unnecessary, unused, or redundant solutions. Cloud services is one area that may be particularly ripe for cost-cutting, as “cloud sprawl” often comes with steadily increasing costs and lower ROI over time.
Cloud sprawl is often the unintended — and uncontrolled — result of increased licenses and instances, services, and other line items that organizations accrue over time. Not only does cloud sprawl impact your budget, it can also impact employee productivity. Since more services and accounts typically require more support and oversight, the downstream effects of cloud sprawl can include employee burnout and turnover, security vulnerabilities, and more.
But don‘t limit your audit to just cloud solutions. Gartner reports that the costs of software, IT services, devices, and more are on the rise year over year, so a clear-eyed audit of all ongoing costs may turn up several areas where spending can be cut without impacting productivity. With more budget in the bank, technology teams may be able to breathe a little easier in their quest for improved efficiency.
Augment Staff with Partners and Technologies
Efficiency initiatives often lead to headcount reductions. But if done purely as a cost-cutting effort, rather than in service of strategic goals, these cuts can ultimately do more harm than good. Headcount reductions can, after all, lead to institutional knowledge loss, lower employee morale, and increased burnout on the part of remaining workers — none of which are great boosters of operational efficiency.
Instead of cutting staff, look for ways to make them more effective. Empowering them with technologies, like those known collectively as Industry 4.0 (or 4IR), can deliver seismic gains across the organization. These technologies, like IoT, AI, robotics, and more, have proven impact: McKinsey’s Operational Excellence Survey found that organizations that enable their teams with these technologies were more likely to achieve end-to-end operational excellence than those that haven’t yet done so.
In addition, strategic partnerships can also deliver key efficiency gains without exceeding your budget. The right partner can, for example, help address talent gaps and augment a team’s skill sets without the costs and lengthy hiring processes that come with full-time hires. They can often deliver this talent on flexible, contract bases that align with a short-term project timeline or an ongoing initiative. This approach can help you not only hit efficiency targets while staying well within your budget, it can also help existing staff remain focused on the key tasks they’re already best equipped to perform.
Takeaways for Tech Leaders
Operational efficiency is a top priority at almost every organization today, and more tech leaders are being asked to achieve those efficiencies with fewer resources than at any other time in recent memory. That’s a tall order for any leader, but with the right strategies — and maybe the right partners — today’s ambitious efficiency goals can be well within reach. Consider:
- Aligning on what efficiency means and how it’s measured, not just in tech functions, but across the enterprise
- Creating structures that measure performance and enforce accountability at every level
- Auditing cloud, software, infrastructure, and other expenditures for signs of sprawl, and eliminating unnecessary spending wherever possible
- Leveraging technologies like AI, automation, and IoT, as well as strategic partnerships, to augment teams and empower them to do what they already do more effectively
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