Role of modern CIOs: Driving innovation and growth through strategic IT investments

From merely managing costs to driving measurable outcomes, CIOs play a pivotal role in transforming IT to foster innovation and business growth.

Digital transformation continues to reshape the financial landscape as institutions are increasingly challenged to align IT investments with tangible business outcomes. A recent Cognizant-commissioned IDC study found that 73% of chief information officers (CIOs) surveyed struggle with full-cost visibility into technology spending across departments and projects, with more than 40% identifying complex legacy systems as a major barrier.

The Cognizant study also showed that 69% (of the surveyed executives) do not regularly benchmark IT spending against industry standards. Meanwhile, 50% of organisations lack sufficient tools to analyse costs and make informed decisions on funding digital initiatives.

Despite this struggle, IT costs have grown about 4.5% over the last decade. This will continue to grow in the medium term, said Matei Iurascu, Head of Transformation at Cognizant, Southeast Asia and China, during the "Maximising ROI: Strategic IT Investments and Cost Intelligence in Banking and Financial Services” a roundtable event organised by Asian Banking & Finance, in partnership with Cognizant.

The roundtable event, attended by senior executives from BFSI organisations, was held on 20 February 2025 at JW Marriott Singapore South Beach. It aimed to address the biggest challenges in relating IT investments to measurable business outcomes and how organisations can overcome them.

Challenges to IT cost intelligence

Adopting new technologies should theoretically lead to economies of scale or increased efficiencies. However, this is not always the case. Organisations often face the dual burden of maintaining legacy systems whilst managing expenses associated with advanced technologies.

Iurascu pointed out that businesses may be cautious about shifting strategic direction due to a lack of clarity on how IT contributes to business value and the challenges in measuring that value effectively.

“There is no one absolute measurement,” Iurascu said. He added that total cost of ownership, return on investments, key performance indicators, competition benchmarking, net promoter score, customer perception, and customer satisfaction are all valid measurements, depending on what the business wants to appraise.

Aligning IT costs with business value
The modern CIO must move beyond traditional cost management and embrace IT cost intelligence, an approach to spending that aims to understand, manage, and optimise IT-related costs and investments whilst analysing its cost effectiveness and ROI in relation to broader alignment of their overall business objectives

During the roundtable discussion, delegates highlighted a shift in IT’s role and business expectations from being mere “coaches” offering guidance to being actively and directly involved in making business decisions. Bringing tech professionals into business discussions will help align IT investments with strategic priorities. Further, they offered their views on balancing cost with customer satisfaction. Though there are clear decision-making hurdles caused by misalignment and organisational structures, the main takeaway is simplification as a goal—making complex products easy to understand, as well as building quality services that create lifelong customers.

IT should be viewed as one of a key lever for business growth and innovative strategies. The key differentiator lies in the ability to identify and implement opportunities with a shorter time to market.

It was also noted during the discussion that the IT strategy should extend beyond internal operations and focus on external factors impacting the business that are beyond the organisation's control.

Adopting an IT cost intelligence approach equips CIOs with tools that can effectively manage their organisation digital transformation. This approach not only helps in optimising costs but also drives impactful investments that lead to innovation and sustainable business growth.