IT Leaders: use it or lose it: How to justify technology investments in FY27

Now more than ever, IT leaders are feeling the pressure to make every single line item in their budgets count. What could once be justified as a long-term investment in transformation, or an incremental improvement on current systems and processes, is now being scrutinised. This was bound to happen. Hidden waste across cloud, software licences, duplicate tools and underused platforms are causing budget blowouts and eroding the value of technology across every organisational function. At the same time, AI demand is putting more pressure on hardware costs, making it critical to get more value from the hardware you already have in place. 

Every single technology investment – large or small – must demonstrate clear, meaningful ROI. Politics or vendor hype isn’t going to move the needle like it once could. Even AI, the most hyped category of the last two years, isn’t exempt. Forrester found enterprises are deferring 25% of planned AI spend into 2027 as CEOs increasingly defer technology investment decisions to their CFOs, who overwhelmingly demand clearer ROI before approving investment. 

So, how do you reign in your technology spend and make the most of the investments you do make? It starts with getting your house in order by understanding what you already have.  

Start with governance 

Imagine seeing the same ad for a nice kitchenware set everywhere you look. If you’ve got a perfectly good set sitting at home, you’re less likely to buy it on impulse. But if you’ve just moved house and have no idea where everything is, you might be tempted.  

That’s what happens to IT budgets. Vendor hype has teams chasing the next tool, when (and often because) they’re not using the current tech stack to its full potential. When governance takes a back seat to innovation for innovation’s sake, technology spend creeps up to unsustainable amounts. The issue is not that organisations are overspending on technology. It’s that there’s no governance. Strong governance means having visibility over what and how the technology you have is being used, the value it brings and what additional value is yet to be realised.   

Once you’ve done that work and guardrails are in place, then (and only then) you’ll be in a position to make informed decisions on where to invest, as well as what to retire. It’s rare to do this exercise and not come away with opportunities to reduce costs, maximise the value of your existing investments or both.  

Are you leaving money in the cloud? 

Optimising the technology you use is one thing. But you may still be spending more than you need to if those workloads are running in the wrong place.  

This is particularly true for cloud workloads. As cloud costs come under scrutiny, organisations are repatriating workloads away from public cloud, to private environments that offer the cost predictability and control that hyperscalers can’t provide. This is why workload placement is fast becoming a strategic skill for IT leaders – one boards and finance teams will need to see before they endorse your technology roadmap. 

The fix starts with one question: given what this workload does, what’s the best platform for it right now? Stable, latency-sensitive workloads belong in controlled environments. Dynamic, cloud-native workloads belong in public cloud.  

What about AI infrastructure? As AI becomes part of everyday workflows, the infrastructure supporting it needs to be reliable. Public cloud is ideal for AI testing, but once ROI is proven, private environments can deliver more predictable costs.  But that doesn’t mean your entire environment needs to be built to AI-grade spec. In a market where compute costs are already climbing to meet AI demand, overprovisioning for workloads that will never need it is just waste.  That’s workload placement discipline. And it’s where cloud cost problems get solved.  

When we review where an organisation’s workloads are running, we can typically save them 10-30% straight away by placing workloads where they run most efficiently. One example is a financial services institution that acquired another financial services organisation. Following the successful migration of the acquired organisation’s systems, we reviewed their environment to see where they had overprovisioned. In doing so, we helped them rationalise their environment while maintaining the system performance standards that customers and regulators expect.  

To Find out where your workloads will perform best, download our detailed guide to workload placement. 

Make the most of the hardware you already have 

The infrastructure provisioning question should extend beyond just AI infrastructure.  

According to ADAPT research, 90% of enterprise data remains on-premise. Most, if not all, of those workloads would run better, cheaper and with less operational burden somewhere else. As a start, bringing your business-critical hardware to a colocated facility means the costs, burden and people risk (amplified by the IT staff shortage) disappear and you’re left with infrastructure that just works.  

And now more than ever, that’s essential to keeping IT cost-efficient. The cost of new hardware will remain high until 2028 at the earliest. Every second your hardware isn’t running at an optimal level (which is harder to do in a server room with an internal team than in a dedicated, managed facility), it degrades faster than it should – leading to higher long-term costs that don’t make sense in today’s technology landscape.

An IT budget you won’t need to defend  

With clear visibility, strong governance efficient workload placement and maximising the value of your hardware will put your organisation in a strong position amid a changing IT landscape. As the focus of boards move to emerging technologies (especially AI), the ability to demonstrate value from your existing technology investments, as well as the data to say no to bad choices, will become an essential IT leadership skill.  

If you’re looking for guidance on what your technology strategy should look like in FY27 and beyond, get in touch. We’ve been managing Australian IT environments since 1988, specialising in regulated and complex estates. So, whatever your technology needs, we can guide you through them by establishing a strong, secure technology foundation – and solidifying it as you grow.

Contact our team.