Five concrete actions that give the CFO control over IT expenditure

IT expenditure is rising rapidly and becoming increasingly complex to manage. In this article, you can read about the biggest challenges and opportunities in getting IT expenditure under control, receive five concrete suggestions for the CFO – and learn from the experiences of companies that are already working strategically with IT cost management.  

IT expenditure has increased markedly in recent years – and the trend only appears to be accelerating. In fact, Gartner estimates that IT spending through to 2030 will double, which only makes the need for control and oversight even more essential. But the task is more difficult than ever.  

Where previously one could gather almost all IT costs in a single departmental budget, expenditure today is allocated across the entire organisation: marketing, customer service, finance and production make their own decisions about systems and services. This decentralisation means that both the IT director and other central functions are increasingly left with the bill, without having had any influence on the decisions behind it – whilst the decentralised units often lack the competencies for effective cost management.  

Therefore, it is crucial to create transparency: who is actually driving IT costs? The ability to create structure and oversight of your IT costs will thus become a strategic competitive parameter going forward. 

At the same time, this requires a fundamental change in governance models and behaviour across the organisation. Employees and managers must learn to think cost-consciously with every IT decision, whilst traditional budgeting processes must be replaced by dynamic management systems that can keep pace with accelerating technological development. This requires both new competencies, changed incentive structures and a cultural transformation – a process that takes time to embed in the organisation. 

Companies today face a series of structural challenges that make professional management of IT costs more critical than ever. Firstly, the negotiating position has been weakened. High switching costs mean that the threat of changing suppliers no longer functions as an effective tool. Suppliers exploit this and maintain high margins, even though underlying technology prices, such as storage, have fallen markedly.   

At the same time, IT costs are expected to double over the next five years, driven by a massive proliferation of consumption-based pricing models. Today, consumption-based solutions comprise around 20% of an IT budget, but this figure will rise sharply, further reducing companies' ability to negotiate and control expenditure. 

The development is being accelerated by AI, where new solutions are often charged in tokens or other consumption-based units. This places heightened demands on precise attribution in your IT costs – otherwise it becomes impossible to maintain control over your IT budget and thereby determine whether your expenditure is actually creating value. Added to this are suppliers' increasingly complex pricing models, which are typically preset to the expensive default settings. For developers, who focus on stability, security and performance, economics often ends up far down the priority list, which amplifies the risk of unnecessarily high costs. Therefore, clear policies are needed. 

You can think of it this way: Just as there are travel policies where employees must adhere to specific expenditure for hotels and flights, for example, there should also be policies for the use of technology, including AI and cloud services. This ensures that costs are kept under control and that accountability is clear. It also provides the opportunity to optimise costs, precisely as one would attempt to minimise travel costs. 

In the reality described above, the CFO must take a far more active role in managing IT costs. This is not only about reacting to rising expenditure, but also about building a systematic foundation for governance that creates transparency, accountability and strategic control. If IT costs are not managed properly, they end up as a black box, where investments cannot be linked to business value – and where the risk of economic inefficiency grows year on year.  

To address these challenges, the CFO should particularly focus on five central actions, which together can ensure both insight, ownership and governance in the company's IT consumption: