Effective technology cost management is no longer just about trimming budgets - it's about aligning spending with business value. Without this critical alignment, decision-making becomes a guessing game., With advancements in Cost Intelligence, technology leaders are now able to make confident, data-backed decisions, driving strategic transformation and delivering measurable ROI.
Attributing ROI to specific technology investments remains one of the biggest challenges for business leaders. Questions like "Which new investment led to income growth?" or "Where can we reduce costs without compromising revenue?" often remain unanswered or based on assumptions. In the absence of quality attribution, these questions are left to guesswork, leading to missed opportunities or inefficient spending.
Cognizant’s recent research, "Technology Cost Intelligence in Asia Enterprises," conducted in partnership with IDC, reveals that this attribution challenge is particularly pronounced in IT investments. The need for clarity surrounding both costs and revenue becomes crucial when organisations pursue opportunities such as automation, app modernisation, and transitioning to modular, service-oriented architectures. To effectively prioritise these initiatives, IT leaders need comprehensive insights into both spending and outcomes.
The findings are stark: 73 percent of IT leaders struggle with gaining full visibility into technology spending across departments and projects. Nearly half - 49 percent - of CIOs find it difficult to align IT costs with tangible business value. Moreover, 64 percent of organisations report limited C-suite alignment on business transformation initiatives. This misalignment means CIOs must work harder to prove the value of each tech investment, particularly in today’s rapidly evolving market.
The Crucial Role of Alignment in Building Trust
Alignment is essential to cultivating trust and confidence among business stakeholders. When alignment is missing, it can fuel resistance to change, as decisions may appear unsupported or unclear. One of the key barriers to alignment within the C-suite is disagreement over tech ROI, misalignment between IT and business departments’ priorities and objectives, and lack of consensus around IT funding priorities.
How Value Pathfinders Leverage Cost Intelligence
The report also categorises businesses into four archetypes based on their approach to strategic leadership and investment decisions. The largest group - Cost Optimisers (39 percent) - is characterised by low C-suite alignment and slow response to market changes. At the other end of the spectrum, a small group of Value Pathfinders (4 percent) demonstrate strong alignment and agility, driving effective, smart investments.
For CIOs, becoming a Value Pathfinder is an aspirational goal that can unlock significant organisational growth. They address the top two challenges in IT cost management effectively: the lack of accurate, real-time data on IT costs (58 percent) and difficulty in aligning IT costs with business value (49 percent). These leaders have turned to Cost Intelligence - a strategic framework that provides analytical insights into IT spending.
Cost Intelligence moves beyond basic cost management by using advanced data analytics to assess ROI in relation to broad business goals. This strategic approach not only helps CIOs identify growth opportunities but also strengthens their position in the C-suite, proving that IT is a growth engine rather than merely a cost centre.
Traditional cost management practices often rely on historical data and siloed information, leaving organisations ill-prepared for future challenges. In contrast, Cost Intelligence provides project-specific insights, enabling more dynamic financial modelling and faster decision-making. This allows companies to respond in real-time to market shifts and accelerate their speed-to-decision.
The Evolving Role of CIOs in Technology Cost Intelligence
Cognizant’s research highlights clear next steps for organisations at each stage of their cost management journey. It also empahsises how CIOs can prominently lead the internal alignment and investment strategies.
- Cost Optimisers: These organisations are currently focused solely on IT costs without aligning them to business outcomes. By adopting better business metrics and predictive analytics, they can gain proactive insights into ROI and identify growth opportunities.
- Steady Transformers: With a foundation of C-suite alignment, these organisations can leverage scenario-based cost analysis to better manage budget adjustments and seize new opportunities in real-time.
- Agile Innovators: While these organisations move quickly, they often face challenges such as shadow IT and growing tech debt. By adopting Cost Intelligence, they can consolidate efforts across departments, align modernisation initiatives, and build scalable solutions that serve the entire enterprise.
To explore this topic further, watch the insightful conversation with Cognizant's Vice President and Market Head for ASEAN & Greater China, Thomas Mathew, and Regional Head of Transformation Management, Matei Iurascu. They delve into how the role of the CIO is evolving from operational oversight to becoming a key strategic driver of business value.
The key industry findings from Cognizant’s full report, Technology Cost Intelligence in Asia Enterprises, can be download here.
