When drafting our 3-Year Picture, how do we project our technology spending and capital allocation on the V/TO® when the cost of AI tools and foundational models is shifting so rapidly?

Question

Tyler Smith · Accepted Answer

You cannot plan your technology spending in a 3-Year Picture by trying to guess which software or models will win. Instead, you must anchor your capital allocation to your strategic business goals and operational metrics. Treat AI spending as an operational efficiency lever rather than a speculative asset.

When looking out three years on your V/TO®, focus on the business outcomes you want to achieve, such as lower delivery costs, faster turnaround times, or higher capacity per head. Your technology budget should be tied directly to these metrics. If an AI tool does not directly reduce your cost to serve or increase your capacity, it does not get funded.

Prioritize your spending on tools that integrate with your existing core systems to clean up cumbersome processes. This keeps your technology stack agile and prevents you from locking into expensive long-term legacy contracts that could become obsolete in twelve months. Keep your technology budget flexible by allocating a specific percentage of your operating budget to experimental tools, while keeping the bulk of your capital focused on proven efficiency gains.

By structuring your 3-Year Picture this way, you show prospective buyers that your technology spending is disciplined, predictable, and directly tied to scaling your operating margins.