The 10 percent cut IT can’t make. AI made it worse
I trained as a Chartered Accountant. My early career was spent in financial services, including time at Morgan Stanley and Barclays, working inside the shared services and infrastructure environments where IT cost allocation is not a theoretical exercise. It is a daily operational reality with real financial consequences.
The first time I saw a senior technology leader genuinely unable to explain to a CFO what his organisation’s IT was costing, I understood the problem. It was not a data problem, exactly. It was a translation problem. Technology costs were recorded in the general ledger in a way that made sense to the systems that produced them, but told almost no story to the people who needed to make decisions based on them.
That gap — between what the numbers say and what leaders need to know — is what MagicOrange was built to close. And it is the lens through which I think about our role on the FinOps Foundation Governing Board.
The Foundation represents the most serious practitioner-led effort to bring financial discipline to technology spend. Joining the board at this moment, when AI is fundamentally reshaping the cost dynamics of every enterprise technology function, is both a responsibility and an opportunity.
Organisations that have invested in ITFM and FinOps practices over the past several years are better positioned to govern AI spend. They have the cost models, the allocation frameworks, and the organisational habits that make it possible to attribute consumption to the functions and products generating it. Organisations that have not built those foundations are now facing a compounding problem: traditional IT spend already difficult to govern, plus AI spend with entirely new consumption patterns and pricing models, plus board-level pressure to demonstrate ROI on every AI investment.
The operational question is not whether to build a Technology Economics capability. It is how quickly you can do it.
At MagicOrange, we have spent years refining what that implementation journey looks like in practice. The technical architecture matters, but so does the organisational change that surrounds it. Getting finance and IT speaking the same language. Building service catalogues that reflect how the business actually consumes technology. Establishing governance processes that work with monthly business rhythms rather than against them. These are not glamorous problems. They are the ones that determine whether a technology economics programme delivers lasting value or becomes another project that never reaches its potential.
Being on the FinOps Foundation Governing Board means we bring that operational depth into the conversations that shape industry standards. The board includes practitioners from global financial institutions, hyperscalers, and major enterprises.
We are looking forward to FinOps X in San Diego in June. If you are a CIO, CFO, or IT finance leader working through this challenge, schedule time with me at the show.
The budget squeeze is real. AI just made it more urgent. The organisations that build the right foundations now will have a structural advantage in how they manage technology investment for the next decade.
Blake Davidson | COO, MagicOrange
MagicOrange has joined the FinOps Foundation Governing Board, helping shape the future of AI cost management and Technology Economics.
Read the full announcement: MagicOrange Joins the FinOps Foundation Governing Board
#FinOps #ITFM #TechnologyEconomics #AIcosts #FinOpsFoundation #MagicOrange #CloudFinancialManagement #TBM #EnterpriseIT
