Why IT Leaders Are Rethinking Their Budgets: Global CIO Insights from 2025

When CIOs from manufacturing, pharma, aviation, and banking met virtually this year, one question dominated: where is all the money going? The answer surprised even seasoned technology leaders.

The Budget Paradox

While 44% of IT leaders reported significant budget increases in 2025, they're facing an uncomfortable reality: the money isn't going where they planned. A staggering 59% of unexpected IT spending went to staff salaries alone—not new initiatives, not innovation, but simply keeping existing teams intact.

Noor us Samad, CIO at Thal Limited (Pakistan's manufacturing sector), experienced this firsthand during a major cloud migration that revealed unexpected costs at every turn. The dual pressure of modernization and cybersecurity threats wasn't in the original plan—but it became the priority.

A CIO from Egypt's banking sector described another challenge: currency devaluation made salaries uncompetitive overnight, with fintech startups offering multiples of what traditional banks could pay. The solution? Building an internal academy to train fresh graduates. The complete discussion about IT Academy implementation, including lessons learned and practical considerations from banking sector experience, is detailed exclusively in Compass CIO.

The Urgent Request Trap

The Global CIO survey revealed that urgent business requests accounted for 34% of unplanned spending, with legacy system support taking another 31%. But how do you distinguish genuine urgency from noise?

IT leaders shared a filtering framework—five control questions that kill weak initiatives before they drain resources:

1. "What happens if we DON'T do this?" (No threat of fines or customer loss? Reject it.)
2. "Which current projects must we stop?" (Priority requires sacrifice.)
3. "How will we measure success in 3 months?" (Vague goals = expensive failures.)
4. "Who uses this daily?" (Under 5% of your team? Question the ROI.)
5. "What are the hidden costs after launch?" (Support often exceeds 30% of initial investment.)

When a CIO from Saudi Arabia's aviation sector received a government mandate to integrate visa issuance with ticket sales, these questions didn't apply—it was a national security imperative. But for most "urgent" business requests, this framework provides the vocabulary to push back diplomatically.

The complete discussion of these five questions with detailed implementation guidance and real-world examples from banking, aviation, and manufacturing sectors is available exclusively to Compass CIO members.

The Talent Crisis Reshaping IT Departments

A CIO from Africa's nonprofit sector raised a question that resonated globally: "How are you handling currency volatility? SaaS providers hike prices when currencies devalue, but budgets don't adjust automatically."

The currency issue illuminates a deeper problem. IT leaders from developing markets—Egypt, Pakistan, multiple African nations—described losing senior talent to Gulf countries at alarming rates. A banking sector CIO admitted the harsh reality: "We can't match Gulf salaries. We train juniors aggressively knowing we'll lose 30% of seniors annually."

Jorge Paracampos Jr, IT Manager at Herbarium Laboratorio Botanico (pharmaceutical sector), noted another dimension: "It's not just about salaries. It's the entire value proposition—remote work policies, learning budgets, career pathways. The conversation has fundamentally changed."

Strategies ranged from creative (internal academies) to pragmatic (hybrid teams with strategic roles in-house, tactical work outsourced). One CIO from India's tourism sector implemented RPA to free senior specialists from routine tasks, effectively doubling their capacity without hiring.

The complete talent retention discussion with comprehensive strategies from IT leaders across Asia, Africa, and Middle East—including specific approaches that worked in banking, manufacturing, aviation, and tourism sectors—is available exclusively to Compass CIO members.

What This Means for 2026

Modern IT budgets aren't cost centers—they're investment portfolios. The CIOs who succeed aren't the ones with the biggest budgets. They're the ones who master three disciplines:

• Filtering ruthlessly: saying no to weak initiatives using data, not instinct
• Protecting strategic talent: not just compensation, but the entire employment value proposition
• Maintaining flexibility: reserving budget capacity for genuine urgent needs

As one participant summarized: "Our job isn't to spend less. It's to spend right."

Want the complete analysis? Compass CIO members have access to the full discussion transcript with detailed insights from IT leaders across six countries and multiple sectors—including the complete five-question framework with practical application examples, in-depth exploration of urgent request management, talent retention strategies tested in challenging markets, and budget allocation scenarios for different business situations.

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This article summarizes key insights from the Global CIO networking session "IT Budgets 2025-2026: Priorities and Optimization Points" featuring IT leaders from manufacturing, pharmaceuticals, aviation, banking, nonprofit, and tourism sectors across Asia, Africa, Middle East, and Latin America.