MagicOrange’s Stephen Coull and Blake Davidson explore how CIOs can turn opaque IT budgets into strategic tools for business growth.
As digital transformation accelerates and cloud migrations continue, CIOs are facing twin pressures: mounting demands for innovation and relentless cost scrutiny. The challenge isn’t merely to control spend – it’s to create visibility that enables strategic conversations about where to invest, optimise or reduce.
IT budgets are often the first to face cuts. “Every year, the CFO comes knocking, asking for five, ten percent savings – but insists service levels must stay the same,” says Stephen Coull, global head of sales at MagicOrange. At a banking transformation conference 20 years ago, a Merrill Lynch CIO once described his IT budget as a “magic orange” – endlessly squeezed for more juice without bursting.
That metaphor gave rise to MagicOrange’s mission: helping organisations extract insight, not just cost savings, from their technology spend.
Unpacking the black box
Modern IT estates are complex — spanning cloud services, firewalls, storage and legacy infrastructure. For many enterprises, this has created a “black box” of expenditure: difficult to decipher, harder to justify.
“CIOs need to unpack where that spend is going and connect it directly to business objectives,” explains Blake Davidson, MagicOrange COO and a qualified chartered accountant. “In a bank, for example, technology investment should be mapped to business functions like retail or wealth, showing how each service is supported by underlying IT spend.”
This approach shifts the narrative from short-sighted cuts to informed trade-offs, aligned with actual business impact.
Bridging the IT–business divide
A major barrier to transparency remains communication. While business leaders talk in terms of growth, ROI, and customer outcomes, IT often speaks in technical metrics.
“Technology leaders need to adopt the language of business,” says Blake. “Instead of discussing firewalls and servers, explain what Salesforce costs per CRM user — and what that means for the bottom line.”
Stephen adds that international frameworks now exist to help translate technical expenditure into business terms, allowing all stakeholders to speak a common financial language.
From visibility to value: the role of unit economics
One practical method for evaluating technology investment is unit economics — understanding the cost of delivering a single business outcome. “If cloud costs double, but transaction volumes increase fivefold or quality improves, that’s a positive return,” Blake notes.
This could mean measuring cost per gigabyte stored, per server, or per application user. For insurers, it might be cost per policy processed. These metrics tie spend directly to performance.
Start with what you have
A common misconception is that organisations must wait for perfect data before taking action. Stephen disagrees: “You’ll never start if you wait for clean data. Begin with what’s available – the general ledger is typically reliable, and operational systems, while messy, can be improved over time.”
MagicOrange pulls from both sources. Financial data from the general ledger provides audit-grade accuracy, while operational inputs help refine understanding. Over time, discrepancies in ‘dirty data’ – such as outdated asset records – can be addressed to improve fidelity.
AI’s promise and responsibility
MagicOrange has embraced AI to accelerate insight. Its new AI interface, MagicOrange Genie, allows users to ask natural-language questions like “What is my most expensive application?” and get instant, actionable answers – no dashboard digging required.
But AI introduces new governance challenges. “Like any tool, AI can either deliver value or drive waste,” Blake cautions. “That’s why we emphasise knowing your numbers, building robust business cases, and tracking whether promised benefits are realised.”
Equally important is the human factor. As AI adoption grows, CIOs must grapple with its wider implications.
“There’s a real risk of job erosion,” warns Stephen. “We need to think about retraining and protecting specialised roles – not just achieving ROI.”
Blake agrees: “In South Africa, white-collar roles are already being displaced by AI. US developer headcounts are down. These trends can’t be ignored.”
Transparency leads to advantage
For CIOs aiming to regain control, the journey begins with education and awareness. According to research shared by the TBM Council, organisations with mature IT financial management practices can save 5–20 percent of their technology spend. For a firm spending R100 million annually, that’s a potential R20 million in savings.
Yet only 25 percent of enterprises are currently operating at that level of maturity.
“The opportunity is massive,” says Blake. “Those who master cost transparency will be the ones who secure future investment, fuel innovation, and demonstrate measurable business value.”
MagicOrange provides the platform to do just that – delivering clarity across on-premise, hybrid, and cloud environments. “Many companies run separate tools for cloud and on-prem,” Stephen notes. “MagicOrange unifies both, pulling data from general ledgers and cloud APIs alike. So, you can see, for example, how shifting a server cluster to AWS changed your total cost per transaction.”
In today’s economic climate, that kind of insight isn’t just valuable – it’s vital.
