Tech leaders face unprecedented pressure as technology costs escalate and visibility into these expenditures diminishes, according to a new Cost Intelligence report from technology provider Cognizant. The report highlights a significant drop in cost transparency, from 73% in 2022 to just 53% in 2024, causing numerous organisations to struggle in tracking their technology budgets effectively.
According to the report, tech leaders are now tasked with aligning their technology investments with tangible business outcomes. However, 65% of respondents reported difficulties in linking spending to business value, while 67% stated they were unable to act effectively on cost insights.
Rob Marchiori, Cognizant Australia Country Lead, commented, "As demand for generative AI solutions continues to surge, Australian business leaders are under pressure to innovate in the face of diminishing cost visibility and increasing tech debt."
He continued, "The Cost Intelligence Report underscores the critical need for advanced analytical tools and streamlined systems. By simplifying their architecture and focusing on engineering excellence, organisations can better manage their technology investments, ultimately balancing the complex demands of innovation and cost control in today's challenging landscape."
The report cited several key findings:
Firstly, technology costs have accelerated while cost visibility has plummeted, leaving organisations struggling to effectively track and manage their technology budgets.
Secondly, aligning technology costs with business value remains a significant challenge, with 65% of tech leaders finding it difficult to link spending to business outcomes and 67% unable to act on cost insights effectively.
Thirdly, the impact of legacy systems and the widespread adoption of Software as a Service (SaaS) models have convoluted management efforts, with tech debt becoming a substantial obstacle to modernisation.
Finally, the report highlighted the generative AI paradox, where AI promises significant advancements but brings about new challenges requiring substantial resources, skilled talent, and enhanced cybersecurity measures.
To address these challenges, the Cost Intelligence Report emphasises the need for organisations to focus on reducing architectural complexity within their technology ecosystems. Simplifying systems and striving for engineering excellence are viewed as essential strategies for achieving cost efficiencies and enhancing overall business capabilities.
The report also suggests that businesses need advanced analytical tools to regain control over their technology costs, ensuring that new investment drives meaningful business outcomes.
