The CIO’s Challenge: How to Achieve Cost Savings and Continuous Development at the Same Time?

Economic uncertainty, new regulation, and technological disruption are forcing Nordic companies to transform. A recent Nordic study commissioned by Midagon reveals that CIOs are under pressure: costs must be cut, yet IT must simultaneously act as a driver for business development.

Cost Pressure Drives Prioritisation 

Companies are looking for quick, measurable savings. Large-scale, long-term transformations and sustainability projects are currently taking a back seat as the focus shifts to smaller, more agile initiatives that deliver clear short-term results (such as return on investment, ROI). In terms of IT systems, consolidation and decommissioning of legacy systems are emphasised: “We don’t need eleven CRM systems – one is enough,” noted one interviewee. 

This trend is also reflected in budgeting: investment decisions are subject to stricter scrutiny and centralised control. Long-term benefits that are difficult to measure are no longer sufficient—every project must have a clear business case that delivers value in the short term as well. However, cost optimisation cannot remain just about cutting expenses; the CIO must be ready to pivot IT toward supporting business growth when the economy recovers. 

Digitalisation and AI – A Necessity, not a Choice 

While costs are being reduced, demands on IT are increasing, and complexity is growing. Although AI and automation are seen as key enablers for efficiency and for developing both new and existing businesses, their adoption creates challenges. Issues include talent shortages, data quality, and the cultural change required. The CIO’s role is critical: How can we ensure that technology initiatives support the business and deliver value? 

According to the study, companies are investing particularly in: 

• Process automation and resource efficiency 

• Cloud services and data infrastructure 

• Leveraging AI to improve customer experience and productivity 

While AI and digital opportunities invite rapid change to maintain competitiveness, it’s important to stay grounded and avoid the hype: investments must be strategic and based on clear, measurable business benefits. 

Change Management Determines Success 

Beyond technology, people and culture are decisive. Resistance, lack of skills, and unclear communication can derail projects. The study emphasises strong leadership and clear communication: why is the change happening, and what are the benefits? 

Key success factors include: 

• Executive commitment and visible support 

• Clear communication and change programs 

• Skills development and reskilling 

Regulation and Cyber Security Accelerate Change 

Business needs and changing customer behaviour are driving companies to digitalise—regulation and cyber security accelerate the pace and set boundaries. The EU’s AI Act, DORA, GDPR, and other tightening regulations impose strict requirements on organisations. The CIO must ensure that development initiatives comply with regulations and do not compromise security. Regulation and the changing climate increase pressure to invest in cyber security, data management, and risk management. 

How Can the CIO Succeed? 

• Everything starts with strategy: Ensure that the company's IT strategy is aligned with the business strategy and supported by top management. 

• Create a clear roadmap: Build multi-year roadmaps based on the IT strategy that address business needs in both the short and long term. 

• Ensure the IT operating model: Does the operating model and IT strategy support long-term goals? Does the roadmap address alternative costs and the management of outdated systems and practices? 

• Focus on efficiency first: Automate processes, consolidate systems, and leverage cloud services. 

• Choose technology strategically and prioritise investments: Invest in AI and data platforms but avoid the hype—clarify priorities first and ensure a clear ROI for new technology acquisitions. 

• Build change capability: Develop IT capabilities and skills over the long term and engage staff in changes according to the IT roadmap and operating model. Building a learning IT organisation requires courage to experiment and even fail. 

• Continuously manage compliance and security: Compliance is a critical competitive factor and a prerequisite for operations. 

Today, the CIO’s role is more than managing technology—it’s about cost-effectively ensuring business continuity and competitiveness. Those who succeed in combining savings and development will win in today’s tough competition.