TM Floyd Case Study

How a state agency found a quarter of its system cost, and the revenue it had been leaving on the table.

The Impact in Numbers

25% lower system cost. $1.2M annual savings. $7M potential revenue.

The Situation

Quiet costs are the hardest ones to see. Systems that were sound when they were implemented get carried forward year after year because no one has had reason to revisit them. The cost of carrying them doesn’t show up as a crisis. It shows up as a budget line nobody examines too closely, renewed each cycle because examining it has never been anyone’s job.

That was the position one state agency was in. Its core systems still ran, and the people who depended on them had no particular reason to think anything was wrong. But the infrastructure underneath them had aged into the expensive part of the budget without anyone deciding it should be. It was maintained, licensed, and hosted at a cost that had simply become the baseline. The question was not whether the systems worked. It was whether the agency was paying far more than it needed to for the privilege of running them, and whether the money tied up that way could have been doing something else. Nobody was asking what the status quo actually cost, so nobody knew.

The Work

We started with an assessment, because the agency couldn’t make a defensible decision about systems it had never fully costed. The work was to put a number on the status quo. Not a directional estimate, but the actual annual cost of continuing exactly as things were, set against the cost of moving the same workloads to a modern cloud footing.

The assessment mapped each system to what it genuinely required rather than what it had historically been given, identified where the agency was paying for capacity and licensing it did not use, and modeled a transition path that moved the workloads without interrupting the services that depended on them. The output was not a transformation pitch. It was a costed roadmap the agency could take to its own budget owners and defend line by line, which is the only kind of recommendation a public agency can actually act on.

1. Mapped what each system genuinely requires against what it had historically been allocated and paid for.

2. Costed the actual annual status quo against the cost of a modern cloud footing.

3. Modeled a transition path and a line-by-line roadmap the agency’s own budget owners could defend.

The Impact

The number the agency had never put on the status quo turned out to be substantial. The assessment mapped a cloud transition projected to cut system costs by roughly 25 percent, on the order of $1.2 million a year. The saving did not come from removing capability. It came from no longer paying for infrastructure the workloads did not need.

The more consequential finding was the one the agency had not thought to look for. The same assessment surfaced more than $7 million in potential annual revenue that the existing arrangement had been leaving unrealized, a figure equal to roughly three-quarters of the agency’s IT budget. The cost of the status quo, fully accounted for, was not just what the agency was spending. It was what it was failing to collect.

None of this required the agency to gamble on a rip-and-replace. It required someone to do the accounting it had never had reason to do, and to present the result in a form its budget owners could approve. The systems still run. They now run on a footing the agency chose deliberately, at a cost it can defend, with a revenue opportunity it can finally pursue.

Does This Sound Familiar?

If a budget line has been renewed for years because examining it was never anyone’s job, the first step is not a transformation program. It is a scoped assessment that puts a defensible number on what the status quo actually costs. That’s a short conversation to start.

About TM Floyd

TM Floyd has spent nearly 50 years helping organizations improve operational performance in complex environments. Our work now spans three practices: Talent, Systems, and Performance, serving clients in healthcare, insurance, manufacturing, and government. Let’s start a conversation.