Higher Costs, More Pressure: How AI Investments Can Deliver Under Increased Scrutiny
As the promise of AI has led organizations to elevate IT spend, leaders face increasing scrutiny to show tangible results. For many organizations, tying technology investments to direct business value remains a significant hurdle, with new research from Apptio, an IBM company, finding that while 74% of organizations expect higher IT budgets in 2026, leaders face mounting pressure to demonstrate measurable value from these investments, with ROI uncertainty topping the list of challenges troubling enterprises.
AI and cybersecurity are especially dominating budgets, but leaders are concerned about the costs of these investments. Gone are the days of over experimentation and funneling money into AI initiatives out of FOMO over clear business needs, especially as spending on AI technologies is coming at the expense of other budget areas, with most organizations funding AI initiatives by making tradeoffs. For example, 67% of organizations are reallocating internal capital, 45% are reinvesting savings from AI-driven efficiencies, and 43% are opting to establish dedicated innovation funds to fund their AI programs.
At some point, CEO and CFO tolerance for teams that prioritize expectations over business outcomes will run out. We’re already beginning to see this via the increased pressure to demonstrate ROI, and organizations will need to deliver on their AI investments. The question is, how can they achieve this seemingly difficult goal?
Bridge the gap with frameworks, not fear
Through the right frameworks, organizations can better understand their AI investments and manage spending accordingly. One of the main roadblocks to realizing business value lies within the fact that business and technical people speak different languages.
IT leaders are structuring an enormous amount of sophisticated, shared technology services. Synthesizing and mapping this ecosystem down to a single business KPI, or a much smaller subset of a budget, and then articulating it in the language that CEOs and CFOs care about is not easy. Additionally, people on the technical side might not have as much visibility into budgets or might be more focused on innovation and efficiency over specifics around cost, so these considerations may not be top-of-mind.
Frameworks such as FinOps, IT Financial Management (ITFM), and Technology Business Management (TBM) can help integrate budget considerations into technical processes. These frameworks provide a common language for the business and technical sides to better understand each other. Overall, they evaluate technology spend beyond just hard cost; they see technology as a driver of business value. FinOps, ITFM, and TBM allow organizations to assess their budgets effectively and help ensure that their spend is planned for and optimized in ways that will most benefit the business.
Unfortunately, organizations are still falling short of implementing the capabilities of these frameworks in critical areas. For example, only 35% of professionals using ITFM use purpose-built tools, and more than half still rely on ERP systems or spreadsheets to manage IT budgets and spend. Similarly, only 15% of FinOps leaders report achieving full chargeback for cloud costs and 90% still rely on some form of manual processes and resource optimization. This shows that many organizations still lack the foundational mechanisms needed to drive full cost accountability at scale.
Also Read: AiThority Interview with Glenn Jocher, Founder & CEO, Ultralytics
How to implement TBM, ITFM or FinOps
So how can organizations truly implement these frameworks in a way that’s beneficial to their business? It starts with understanding the right fit for their organization and enabling their teams to implement them from the start.
Overall, ITFM and FinOps both serve distinct yet complementary functions alongside the broader TBM framework. ITFM offers a strategic perspective for IT planning, budgeting, and financial visibility – while FinOps drives operational agility and enforces cost accountability, particularly across cloud and emerging technologies. Together, they help enable IT leaders to move beyond cost control and into the measurable value of their investments.
We could see both ITFM and FinOps evolving to consider new types of cost and business value within the next year. For example, FinOps has released a notion of scopes that include vendor management, IT asset management, and on-prem infrastructure costs.
Bringing “Ops” in FinOps
Take FinOps as an example. Arguably one of the more well-known frameworks, FinOps can coexist within a TBM framework to identify business value. Essentially, FinOps showcases where organizations can potentially save costs – it provides a basis for understanding where money is going and ensuring that money is the right amount, in the right place, for the right reason, so that organizations can eliminate potential waste. However, it is also crucial that its optimization is reflected by people with their hands on the keyboard rather than just being called out by technology leaders.
Within FinOps, there are two kinds of optimization: rate optimization, which encapsulates a unit price, and usage, which covers how many of those units are being used. Rate optimization focuses on financial instruments, such as contracts, suppliers, vendors, and discounts. On the usage piece, unless the people who manage and control these systems implement the recommendations from FinOps, those benefits won’t be realized. Currently, while nearly all FinOps teams manage AI costs, only 13% optimize them, leaving a lot of opportunity to save on the table.
While employing FinOps provides a framework for IT and business leaders to pinpoint potential waste and that could be cut in half, it is imperative for engineers – the SRE and operations teams – to enact those changes in order to actualize the value of FinOps. Therefore, the evolution of FinOps needs to encompass a true convergence of finance and operations.
Measurable business impact
Overall, to measure the ROI of tech investments, organizations not only need the right framework in place, but the right tools and systems to bring financial awareness into the operations of their business overall.
Comprehensive solutions such as those available from Apptio are designed to optimize AI investments and help ensure that they are enhancing value. Learn more about Apptio’s complete, deep platform for IT Financial Management, FinOps and TBM here.
Also Read: The Infrastructure War Behind the AI Boom
[To share your insights with us, please write to psen@itechseries.com ]
Comments are closed.