I've found that there are usually lots of options for improving organizational efficiencies within most IT departments. To begin with, it is useful to take an inventory of IT. By this, I mean look at the physical assets, people, projects, tools and processes. From there, you can go a few different routes. One is to try to better align yourself with your user base. That is, spend some time determining what exactly the corporation (particularly the executives who are ultimately your sponsors) need from IT. Then, go back to the inventory and align and prioritize all things with what the user community needs. You'll find that there are a number of IT tasks that can be terminated or delayed. By focusing on the user community, you also naturally get happy users which helps move IT more towards being an essential resource in budget talks.
Other options include outsourcing some tasks, improving processes and retiring unused systems and applications.