Lungile Mginqi, digital transformation strategist.
IT cost has become the boardroom’s polite fiction. Everyone nods when the numbers are presented − very few believe those numbers explain whether the spend is truly worth it.
Boards ask: Why are we pouring so much into IT without proof of value? CEOs ask: Is this budget fuelling growth − or quietly subsidising inefficiency? CIOs ask themselves how to justify spend when technology is treated as both a cost centre and a value driver.
The uncomfortable truth: costs keep climbing while conviction collapses. We’ve mistaken cost management for strategy. Until cost is reframed as an allocation of value, risk and enterprise energy, the budget cycle remains an expensive ritual.
IT spend rises in every industry, while belief that it funds the right things falls. This is the paradox at the heart of boardroom discussions.
CIOs argue that technology is both a cost centre to be contained and a business enabler to be expanded. Boards demand clarity on value, and CEOs wrestle with governance trade-offs.
Without a common language, the conversation becomes circular while cost becomes the most potent − and opaque − strategic conversation.
CIOs argue that technology is both a cost centre to be contained and a business enabler to be expanded.
Unless boards and CEOs interrogate cost as value, governance and enterprise energy − rather than as line items − every budget will remain a ritual masquerading as strategy.
Why traditional cost narratives fail
Let’s name the boardroom fiction: IT cost is neither strategy nor salvation. For too long, organisations obsess over cost-cutting or benchmarking, mistaking these rituals for decisive action. Benchmarks? Useful, but not the verdict. The real question: does spending beyond the norm purposely create value, or is it just waste with better optics?
Diverge from industry standards only when it’s intentional and measurable − when unique capabilities, regulation, or scale demand it. Otherwise, sameness serves commodity operations. Every spending choice must be explicit: does it drive competitive differentiation, or just maintain the status quo?
Here’s the hard truth: careless cuts always boomerang − what’s trimmed today reappears tomorrow as outages, technical debt, or emergency spend. Efficiency masquerades as progress while fragility metastasises beneath the surface.
Benchmarks seduce boards with false security; CIOs resist, claiming uniqueness. Conformity kills innovation, but reckless exception only breeds chaos. The answer is discipline: be an outlier only with justification, transparency and intent.
Anchor every budget to value, cost and governance − three words that expose the pretence:
Value: What outcomes does the spend unlock? Are these outcomes actually what the CEO and board call value?
Cost: How does spend compare to peers? Does deviation signal strategy or legacy inertia?
Governance: Does the allocation reflect real oversight − risk appetite, accountability, ESG − beyond box-ticking compliance?
If budgets aren’t debated in these terms, the ritual persists − and enterprise value quietly erodes. In a world where unit costs and process telemetry are increasingly machine‑measured, AI can help separate structural variance from waste − but it should inform judgement, not replace it.
Reframing cost as strategic allocation
To move forward, cost must be interrogated in sequence:
- Cost benchmark: Compare absolute spend to peers. If out of line, is it strategy or waste?
- Cost levers: Retire legacy, consolidate vendors, simplify the estate, automate. Cuts without care come back in double doses.
- Cost distribution: Allocate with intent across run, protect, improve, innovate.
This sequence reframes cost as an allocation of enterprise energy, not a budget debate.
From cost buckets to strategic choices
An expensive ritual is what cost becomes when it hides the absence of strategic choices. True discipline starts when spend is framed not as a number, but as a decision.
A simple classification sharpens this:
Run − must do: Keep the business running but contain it.
Protect − should do: Resilience and compliance to shield against disruption.
Improve − can do: Optimisation and efficiency — trimming waste, releasing capacity.
Innovate − may do: Growth bets and future capability, often the first sacrificed when run and protect bloat.
This is value−cost−governance (risk) in action. Value is unlocked through improve and innovate. Cost is disciplined when run is contained. Risk is managed when protect is funded in line with the company’s risk appetite as measured by the Governance Index.
The provocation is clear: do we know the ratio of must do to should do, can do and may do − and does it reflect strategy, or just legacy or previous decisions?
Every board claims to have a strategy, but the run–protect–improve–innovate ratio tells the truth. It reveals whether the company is funding tomorrow’s growth, or quietly paying yesterday’s bills. And if the ratio is wrong, the problem is not the CIO’s spreadsheet − it is the board’s priorities.
Discipline and transparency
True discipline demands more than platitudes − it requires sharp transparency. The organisations that escape ritualised spending don’t just declare principles; they enforce them.
What does real clarity look like? Picture a one-page dashboard: three tiles − value, cost, governance − each with baseline, target, status and bold R/A/G indicators. Owners are named; brief notations track “what changed”.
This isn’t paperwork − it’s a mirror. The dashboard can be assembled from source systems with AI-assisted extraction, but the standard remains human-owned definitions and CFO-signed numbers.
At the centre is “decisions this month” − spotlighting the three to five choices needing CEO or board attention. Each is tied to tangible shifts in metrics, not anecdotes.
Value tiles show not just promises but delivered results − conversion rates, time-to-impact. Cost tiles reveal the true run-protect-improve-innovate mix, alongside unit costs and variances. Governance tracks not just compliance, but decision speed, meeting cadence and closed audit actions.
No duplication, no ornamental forms − just precise, source-linked metrics that force honest conversation and surface drift. Red and amber signals rise automatically to decision level, requiring confrontation, not passive acceptance.
This is discipline and transparency made visible − a direct challenge to cost drift and the inertia of ritualised spend. Anything less is theatre, not strategy.
And yes − use AI only where it measurably advances these goals: automate reporting, expose hidden cost drivers, sharpen value hypotheses. Treat it as leverage for better choices, not a narrative to excuse them. Cost is a mirror of strategy.
There are three uncomfortable questions every board should ask:
- If the IT budget doubled, what enterprise value would the company unlock − and how quickly?
- If it halved, would the company stall − or would it expose subsidised inefficiency?
- Does today’s allocation reflect strategy − or quietly expose the absence of one?
These aren’t questions about numbers − they’re questions about intent. Until CEOs and boards answer them with conviction − on value created and the governance that sustains it − IT cost will remain the most expensive ritual in the enterprise.
