IT Budgeting for 2027

When it comes to budgeting for 2027, IT teams need to put the money where the tech is.

As technology like AI seemingly evolves more rapidly by the day, paying for it has become a top priority—and worry—for IT teams. Experts suggest those teams do their best to prioritize the most pressing technology requests while allocating a share of resources to handling technology debt. But will that satisfy other stakeholders throughout the org?

Mangesh Pimpalkhare, SVP and GM at Splunk, suggested that 2027 could prove different from a budgetary standpoint than past years, largely because of the progress that has been made with emerging technologies like AI.

“We see AI build on a virtuous cycle of actually improving itself, we get even a multi-fold of amplification of all the benefits, so I think that’s very exciting,” Pimpalkhare said. “At the same time, that also produces a lot of change and transformation for enterprises.”

Over the next 12 months, companies will need to implement guardrails around AI without overspending or taking unsafe risks.

“[AI] is producing…even more benefits and even more challenges for enterprises to solve,” Pimpalkhare said. “So, that’s going to be an interesting year where all this shakes out.”

Budget list

It’s no surprise that AI is on the top of everyone’s minds and budgetary must-haves, whether for IT operations or cybersecurity. With token spend still a question for many IT departments, Krishna Sai, CTO at SolarWinds, told IT Brew that teams should be thinking of their capacity as “people plus tokens.”

“We need to think about tokens as a clear dimension to add scalable reasoning and automation capacity to whatever the workloads or whatever your team’s charter is. But if you think about that, then the token usage should be planned like any other operational resource,” Sai said.

Infrastructure week

Another budget lens for IT professionals: infrastructure work that needs funding, especially for critical systems and to support cutting-edge initiatives such as AI.

“You need to ensure that you have a good enterprise stack that is well thought-out, architected, and understood, so that even when there is a new AI experiment that needs to be tried and so on, you’re not inventing some totally new tool,” Sai said.

An AI buildout depends on its IT foundation; issues with infrastructure, such as improperly structured data, will ripple through to how stakeholders use AI.

Takin’ care of tech debt

If that IT foundation is fragmented or brittle, then cutting-edge tech “will not work well” when put into practice. That can mean strengthening the IT foundation—such as data warehousing, appropriate hardware, and so on—is a critical spend.

“It is about which investments are improving measurable business outcomes and how that ties into the workflows that organizations care about, and that strengthens or creates the path for foundation for the future,” Sai said.

Rick Holland, data and AI security officer at Cyera, told IT Brew that the upcoming year should be all about getting the most out of existing technology investments. That means reviewing technology an organization already uses and can access, and figuring out how new technology might bolt onto it.

“There are all new problem sets that we have right now, and existing technology can help with some of it,” Holland said. “Perhaps in a kludgy way, but even if you don’t have a budget, that’s still better than nothing,”

If it’s your first time at the budget table

Pimpalkhare said any shifts in budget allocation in 2027 should anchor on outcomes. For example, budgeting for cybersecurity should take into account the organization’s potential attack surface to be monitored, including applications and endpoints, and how much it is already spending on security.

“What is the quickest time to resolve all security vulnerabilities?” Pimpalkhare said. “That should be the guiding metric for a security solution.”

In a similar vein, the IT operations side should monitor third-party and internal applications, with a clear tally of outcomes tied to total spend; that allows professionals to choose the best solutions and potentially look to new, better vendors.

In short

IT professionals should consider how AI plays into the 2027 budget, and what existing resources need to be examined for eliminating tech debt and solidifying the IT foundation. Here are the tips in a handy checklist:

• Moving from annual planning for IT to quarterly planning can help the organization keep up with fast-moving technologies like AI, Holland recommended.
• Holland pointed to ensuring the organization is using existing tools and products to their fullest extent before adding additional tech or tools.
• Plan for token costs, especially as the AI era continues to grow (and save some room in the budget for experimentation), Pimpalkhare said.
• According to Sai, it’s critical to reach a viable foundation through eliminating tech debt before implementing any further AI models (including agents).