Are you funding a growth engine or just feeding a very expensive utility bill?
Most growth-minded CEOs feel the same tension. Tech costs keep climbing, projects pile up, and yet the board still asks why customer experience is flat and cyber risk feels vague. The spend is large, but the story is weak.
The core issue is simple: your tech budget strategy may be tuned for keeping operations alive, not for driving the plan your investors care about. This article gives you a way to tell the difference, fast, and a path to shift the mix without blowing up your teams.
The Silent Problem With Most Tech Budgets
Photo of a How CEOs Can Tell If Their Tech Budget Is Fueling Strategy Or Just Keeping The Lights On by Tima Miroshnichenko
Most tech budgets are built from the bottom up. Vendors send renewals, teams add “must-have” projects, finance plugs in last year’s actuals, then you haggle over a few percentage points.
What you rarely see is a clear answer to three basic questions:
- How much spend is pure “keep the lights on”?
- How much is directly tied to revenue and margin?
- How much is positioning you for the next 3 to 5 years?
Without that split, tech becomes a tax, not an investment portfolio. Research like Deloitte’s work on maximizing the value of tech investments shows that leaders who treat tech like a portfolio get more impact for the same dollars.
You do not need a 50-page model to get there. You need a simple lens.
Run vs Change: A Simple Lens For Your Tech Budget Strategy
Here is the most practical way to read your tech budget: split it into “run the business”, “grow the business”, and “change the business”.
Think of it like this:
| Category | Typical spend items | Core question to ask |
|---|---|---|
| Run the business | Hosting, licenses, support, device refresh, ops | Does this keep the current operation reliable? |
| Grow the business | CRM upgrades, analytics, sales tools, CX tweaks | Does this help us sell more or keep more customers? |
| Change the business | New products, new channels, automation, AI pilots | Does this create a step-change in how we compete? |
If 70 to 80 percent of your spend sits in “run”, your team is keeping you alive, not moving you ahead.
That can be fine for a year or two in a turnaround. It is dangerous as a steady state for a growth company with pressure on valuation and margins.
A healthy tech budget strategy starts with an intentional target mix. The right mix depends on your growth story, but it never happens by accident.
Five Signals Your Tech Spend Is Stuck On Maintenance
Here are practical signals that your tech budget is mostly keeping the lights on, even if the PowerPoint says “transformation”.
1. You cannot explain your top 10 tech line items in business terms.
If the board asks, “What are we getting for this?” and the answer is “security, compliance, stability”, you have part of the picture, not the whole. You should be able to link major spend to revenue, cost, risk, or customer outcomes.
2. Your project list is dominated by upgrades and replatforms.
Upgrades matter. Old systems fail audits and increase incidents. But if 80 percent of your roadmap is “version X to version Y”, your teams are busy, yet your competitors are the ones actually changing the market.
3. IT success stories never mention revenue or customers.
If your CIO’s wins focus on tickets closed, uptime, and on-time delivery, you are hearing operations, not strategy. Metrics like those matter, but they do not win investor presentations.
4. Tech costs grow faster than revenue.
When technology grows as a percent of revenue, but sales cycles, churn, or margins do not improve, something is off. The Chief Executives Council’s guidance on measuring ROI for software investments is clear on this point: you should see a line of sight from software spend to financial outcomes.
5. Board conversations about tech focus on outages and cyber scares.
If the only time tech shows up in board decks is for risk reports, incidents, or recovery plans, the message is simple. Tech is viewed as a liability to manage, not a lever to grow.
If two or more of these feel familiar, your budget is working hard. It is just not working on the right things.
Metrics That Tell You If Tech Is Really Driving Strategy
You get what you measure. If you only track uptime and cost, you get stable, expensive plumbing.
To see if tech is actually driving strategy, add a small set of outcome metrics at the top of the dashboard. For example:
1. Percent of tech spend tied to strategic outcomes
Tag each major initiative to one or more outcomes: revenue growth, margin improvement, risk reduction, or customer experience. The picture will not be perfect, but you will quickly see if your dollars skew to “run” or “change”.
Work like McKinsey’s five metrics for CEOs on digital success shows that CEOs who track outcome-focused metrics get better returns from digital bets.
2. Time to ship a meaningful customer-facing change
Pick a real example: change a pricing rule, launch a new feature, update a core workflow. How long from decision to live? Shorter cycle times mean tech is close to the business and can respond to growth opportunities.
3. Share of revenue influenced by tech-enabled channels
Track the percent of revenue that touches an app, portal, integration, or automated workflow. Over time, that share should rise as more of your growth depends on technology-enabled experiences.
4. Business value from automation and process improvements
Count hours removed, error rates reduced, or cycle time gains from automation. Tie that to cost savings or capacity released. Guides like Apptio’s overview of IT metrics and KPIs show how operations metrics can, and should, connect back to strategy.
You do not need dozens of KPIs. You need a handful that you would be willing to discuss personally with your board.
How To Rebalance Your Tech Budget Without Losing Sleep
Once you see the problem, the real question is what to do next. Here is a practical path that does not require ripping out everything or hiring an army of consultants.
1. Run a quick “run vs change” diagnostic on your top 20 items.
Take your largest tech line items and classify them using the table above. Get your CIO, CFO, and one business leader in a room and agree on the labels. The argument is the point; it exposes different views of value.
2. Set a target mix that fits your growth story.
If you are pushing into new markets, you may want more in “grow” and “change”. If your margins are thin and risk is high, you may need more in “run” and automation to free up future dollars. Either way, make the target explicit and time-bound.
3. Free cash from low-value “run” and redirect it.
Look for shelfware, overlapping tools, underused platforms, and work that vendors can do better or cheaper. Many mid-market firms can free several percent of revenue in spend by pruning and renegotiating. That money should not disappear into general cost savings; it should move into clearly defined growth bets.
When you treat tech spend like an investment portfolio, you stop arguing only about cuts and start talking about where to double down.
Turning Technology Back Into A Growth Engine
If tech feels like a black box, it is hard to lead with confidence. Once you reframe the discussion around outcomes, mix of spend, and a simple set of metrics, your tech budget strategy becomes another leadership tool, not a monthly headache.
You gain three things: clarity on where the money goes, control over the mix of “run” and “change”, and a story you can stand behind with your board, lenders, and team.
You do not need perfection to move forward. You just need a clear first pass, a target, and the discipline to redirect even a small slice of spend toward real growth.
If you want a neutral partner to help you make that shift, without the cost of a full-time executive, you can learn how CTO Input works with CEOs and founders at https://www.ctoinput.com. To go deeper on topics like technology strategy, cyber risk, and practical AI, explore more insights on the CTO Input blog at https://blog.ctoinput.com.