Before the advent of AI, budgeting for technology was mostly fixed. The CIO created a budget, the CFO signed it off, and everyone was working from a common, stable number for the fiscal year. AI has changed that arithmetic. Consumption-based costs, variable workloads and rapidly evolving models mean the finance-technology relationship now has to function less like an annual negotiation and more like an ongoing partnership.
Rethinking the Budget: From Fixed Lines to Variable Costs
The shift starts with recognizing that AI simply doesn’t behave like the technology spend CFOs are used to approving.
Balaji Raghunathan, Data & AI Engineering Business Unit Leader, Sigmoid says, “IT budgets used to be capex-led (hardware, licenses, predictable upgrade cycles), and then came cloud which changed the game. Now there is an additional variable AI component that depends on token-based consumption and can potentially vary significantly based on the amount of data consumed, the choice of model, and how the agentic flow is architected.”
“As a result of such variability, CFOs are right to ask: ‘I have approved the cloud budget. I have approved SaaS subscriptions. Why is there now an additional AI token bill?’ That question deserves a real answer, not a defensive one,” says Raghunathan, adding, “CIOs need to be upfront that AI is an operating-model decision rather than a one-time procurement, distinguishing fixed costs from variable ones and establishing unit economics early: cost per customer interaction, per document processed, per case resolved.”
Budgeting must be dynamic, tied to usage and governed by clear business outcomes, so a three-year, SaaS-style commitment doesn’t get forced onto a workload built to scale unpredictably.
That kind of transparency, however, works only if the CFO has enough understanding of the evolving technology landscape.
Making CFOs Co-Owners of Tech
To bring the the CIO and CFO onto the same page, several organizations are already taking appropriate actions.
“More often than not, the CFO doesn’t understand the technology and becomes a roadblock. This situation is even more alarming in the government sector where getting funding becomes a big challenge. To overcome this, a growing number of companies are now sending CFOs through short courses on IT,” says Golok Kumar Simli, CIO, BLS International.
Building Cross-Functional Teams
Jatinder Bansal, Group CIO, Arise IIP, believes the same gap that shows up with a CFO can show up with a CEO or any business leader. According to him, closing this gap is not a finance-specific challenge, but an organizational one.
“IT cannot drive all digital initiatives without bringing business along. We need to educate them and explain concepts in simple language so they appreciate technology. Otherwise, IT implements something transformational but business is not able to use it because they don’t understand the relevance,” he says.
Bansal urges the need to have a true cross-functional team. “There must be someone from IT and someone from business with both standing together to sell it to the wider business, anchored by the people who know the business in and out,” he says.
At his company, that means hiring business experts—in supply chain, inventory, AP/AR, production—alongside technologists, with a formal business-partnering (BRM) function inside IT.
“You need business partners who understand IT to a good extent, so they know what is possible, what is not, and the long-term nuances. This helps in creating an ongoing mediator between business and IT instead of rebuilding the relationship every budget cycle,” says Bansal.
The Road Ahead
The road ahead demands shared literacy and durable structure. CFOs need enough technical grounding to engage with unit economics and consumption models while technology leaders need to translate AI requirements into business terms finance can act on with confidence.
Both require a strong infrastructure to thrive. That entails forming cross-disciplinary teams, gaining buy-in from senior stakeholders, and creating Business Relationship Management (BRM) capabilities that will survive beyond any one sponsor or fiscal year. Progressive companies are creating that infrastructure today, ready to upscale AI without rebuilding that foundation every fiscal year.
