Proving tech ROI when every dollar gets a second look

New Zealand’s recovery was meant to be humming by now. Instead, the word NZIER reached for in July was “fragile”. Business confidence rebounded in the June quarter, with a net 12 percent of firms expecting conditions to improve, but that bounce came off a March quarter flattened by the Middle East fuel shock, when the same measure sat at a net 1 percent. Westpac still expects the economy to dodge recession and grow around 1.5 percent this year, which its economists describe, without much enthusiasm, as sub par.

Underneath the headline numbers, the pressure is real. More than half of firms reported higher costs in the June quarter, up from a net 37 percent, and NZIER says ongoing uncertainty, including November’s election, is keeping businesses cautious about hiring and investment. That caution lands squarely on the technology budget.

The awkward global contrast

Here is the strange part. Globally, IT spending is booming. Gartner has lifted its 2026 forecast to 13.5 percent growth, taking worldwide spend to US$6.31 trillion. But look closer and it describes a multi-speed market: the growth is concentrated in AI infrastructure and hyperscaler data centres, with data centre systems spending up more than 55 percent, while everyday enterprise categories grow far more modestly. Forrester’s 2026 planning research found 86 percent of tech leaders expect bigger budgets, yet its overriding advice is caution: plan for multiple scenarios, halt inefficient spending, and keep experimentation cheap.

So the money is flowing somewhere, just not necessarily to you. For a New Zealand CIO sitting inside a 1.5 percent economy, the global spending headlines can make the local conversation harder, not easier, because boards read them too.

The CFO is now in the room

The scrutiny has a face, and it usually signs off the budget. A KPMG survey of finance and technology executives found nearly a third of CFOs consider technology innovation spending excessive, while only 16 percent of CIOs agree. Flip it around and roughly one in three CIOs say their tech budget is insufficient, a view shared by just 12 percent of CFOs. The gap between those two worldviews is where most 2026 budget conversations are being had.

And the evidence base for tech’s side of the argument is thinner than anyone would like. The latest State of the CIO research found only 19 percent of IT leaders say their AI initiatives have met or exceeded business goals, about a third cite ill-defined ROI metrics as a barrier to scaling, and fewer than half have formal KPIs in place for AI work. It is hard to win a value argument without a scoreboard.

Funding innovation from the couch cushions

The response taking shape, here and overseas, is self-funded innovation. Forrester urges leaders to protect investments tied to customer value while cutting inefficient spend, even suggesting organisations declare “tech debt bankruptcy” on legacy estates to free up capital. OpenText executives, reported by IT Brief New Zealand, put it more bluntly: in 2026, AI will be judged not by how many tools it adds but by how many it replaces, and CIOs should expect pressure to show year-on-year reductions across their technology estate of around 10 percent.

That is what doing more with less looks like in practice: rationalising the application portfolio, consolidating data platforms, and turning the savings into the innovation fund the CFO would not otherwise approve.

The encouraging bit is that the role itself is being taken more seriously, not less. Nearly half of respondents in the same State of the CIO research now see CIOs as proactive business leaders who identify opportunities, not order-takers running a cost centre. In a tight economy, the tech leaders faring best are the ones who treat the value story as a first-class deliverable, told in the CFO’s language, backed by numbers a sceptical board can check. This year, the story is the job.