Picture the budget meeting at a $90 million company in late November. The IT director hands the CEO a spreadsheet: last year’s technology spend, line by line, with seven percent added to the total. Every line has a vendor and an amount. Nothing looks wrong. The CEO has eleven other budgets to approve that week, asks whether the increase is mostly inflation, hears yes, and signs.
That is how most mid-market technology budgets get approved, and it is not because CEOs are careless. It is because the spreadsheet answers the questions it was built to answer and none of the ones that matter. This article is the short list of questions we would ask before signing, written for a CEO or CFO who is not a technologist and does not need to become one.
This article is the short list of questions we would ask before signing, written for a CEO or CFO who is not a technologist and does not need to become one.
Why This Year Needs More Than a Percentage
The number will go up whether you change anything or not. Gartner’s October forecast expects worldwide IT spending to grow 15 percent in 2027, and its release is candid that rising prices are doing part of the work: memory prices have more than doubled over the past year, and Gartner expects that inflation to carry through 2027 into servers, PCs, and networking gear. Software is rising too. Microsoft raised list prices on most Microsoft 365 business plans on July 1, 2026; Business Standard went from $12.50 to $14 per user per month, and Microsoft 365 E3 from $36 to $39. Zylo, which sells software spend management and tracks its customers’ portfolios, reported that average SaaS spend rose 8 percent this year while the number of applications stayed flat. Companies are paying more for the same tools.
So a seven percent increase may buy you less than last year, not more. We wrote in September about rebuilding the budget row by row in If Your Tech Budget Looks Like Last Year’s, You Missed the Turn. This piece is the shorter version for the meeting itself: the questions that tell you whether the spreadsheet in front of you deserves a signature.
What Are We Spending, All In?
Start by asking whether the number in front of you is the whole number. In our experience, it rarely is. Marketing pays for its own tools on a credit card. Operations bought a scheduling system three years ago and expenses it as a service. The sales team’s CRM add-ons sit in the sales budget. None of it is hidden on purpose, and none of it is in the IT budget, which means nobody is negotiating it, securing it, or asking whether two departments are paying for the same thing. A useful answer is a single list of every technology contract, wherever it is paid from, with an owner next to each one.
What Renews Next Year, and at What Price?
Most technology cost is decided at renewal, not at budget time, and many renewals happen automatically. Ask for the renewal calendar: every contract that renews in the coming year, the date, the notice period, and what the price will be. Ask which ones carry automatic price escalators. Ask which Microsoft agreements renew after July 2026 and whether the new list prices are in the number.
The surprises are real and common. In Zylo’s 2026 report, 78 percent of IT leaders said they had been hit with unexpected charges tied to AI features or usage-based pricing in the past year, and 61 percent said they had cut projects because of unplanned software cost increases. Those figures come from a software vendor whose data skews toward larger organizations, so read them as direction rather than precision, but the direction is clear: the renewal is where the money moves, and a renewal you notice ninety days ahead is a negotiation, while one you notice the week it bills is an invoice.
What Are We Paying For and Not Using?
Every company with more than a few dozen employees is paying for something it does not use: licenses for people who left, premium tiers nobody needed, a second tool bought because the first one was unknown. In cloud services the waste is easier to measure. In Flexera’s 2026 State of the Cloud survey of more than 750 cloud decision-makers, respondents estimated that 29 percent of their cloud spend is wasted, the first increase in five years. That is a self-reported estimate from a company that sells cloud cost tools, and a mid-market firm’s mix will differ. But it is a reasonable prompt for one question: when did anyone last reconcile what we pay for against what we use, and what did they find?
What Is Due Whether We Budget for It or Not?
Some costs arrive on a vendor’s calendar. Microsoft ended support for Windows 10 in October 2025, and businesses that kept older PCs running bought Extended Security Updates at $61 per device for the first year. The price doubles each year, to $122 for the year that began this October and $244 for the third and final year, and a company that skipped the first year has to pay for it to join later. If your fleet still has Windows 10 machines, the question is whether replacing them now, even at today’s higher hardware prices, is cheaper than paying a rising fee to keep them.
The same logic applies to core systems. Dynamics GP support ends at the close of 2029 and SAP’s standard maintenance for its older ERP ends in 2027, and we laid out why the decision date is earlier than the vendor’s date in Your ERP Vendor Set Your Deadline. Ask for a list of every system with a published end-of-support date in the next three years, and whether next year’s budget funds the decision or only defers it.
Ask for a list of every system with a published end-of-support date in the next three years, and whether next year’s budget funds the decision or only defers it.
What Did Last Year’s Projects Deliver?
This is the question most budget meetings skip. Every project funded last year was approved on a promise: faster close, fewer errors, a new capability for customers. Ask what each one delivered against that promise, in the units it was approved in. A project that cannot answer is not necessarily a failure, but it is a sign that next year’s projects will be approved the same way. In Project Vista we tie each funded project to the result it was approved to produce and end it in a verdict to scale, rework, or stop. You do not need our method to ask the question. You do need the answer before you fund the next round.
What Happens If We Lose Our Systems for a Week?
A technology budget is also an insurance decision, and it is the one CEOs most often delegate without looking. Ask how long it would take to restore operations if your main systems were encrypted by ransomware tomorrow, when the backups were last restored as a test rather than assumed to work, and whether your cyber insurance policy’s requirements are actually met today. Then ask what a week of downtime would cost the business in revenue and customers. If that number is large and the restoration answer is vague, the budget has a gap that no percentage increase will close. Our disaster recovery and cybersecurity work starts with exactly these questions.
Which Lines Change the Business?
Finally, ask how much of the budget keeps the company running and how much changes what the company can do. Both matter, and the right split depends on the business. But in our experience, many mid-market budgets are almost entirely the first kind, not because anyone chose that, but because maintenance and renewals absorb the increase before anything new is funded. If none of next year’s technology money is aimed at a customer, a market, or a capability your competitors lack, that is a decision, and it should be made on purpose rather than by default.
Who Checked This Besides the People Who Will Spend It?
The people who build a technology budget are usually the people who will spend it, and often the vendors who will receive it helped shape it. That is not a criticism of anyone’s integrity; it is how the process works in most companies. A board would not accept a capital plan reviewed only by the team requesting the capital. A second look from someone who has run technology budgets, and who has no stake in which vendor wins, is often the cheapest line item on the sheet.
A second look from someone who has run technology budgets, and who has no stake in which vendor wins, is often the cheapest line item on the sheet.
What This Will Not Do
The opening scenario is a picture, not a client. The Gartner forecast is global and enterprise-weighted, the Zylo and Flexera figures come from vendors whose data skews toward larger organizations, and the Microsoft and Windows prices are list prices that negotiated agreements may change. Our list of questions, and our observations about how mid-market budgets are built, are our judgment from building and reviewing them. None of this tells you what your budget should be. What it gives you is a way to tell whether the one in front of you was built to answer the right questions.
Where to Start
Before the meeting, ask for three documents: one list of every technology contract wherever it is paid from, the renewal calendar for next year, and a list of systems with end-of-support dates in the next three years. If those take more than a week to produce, that is your first finding. If you would like an experienced CIO to review the budget with you before you sign it, a year-end budget review is a natural first engagement for our CIO IQ advisory. If you would rather talk it through first, you can reach us through the contact form on our About page.
