I budget therefore I am

That time of the year when the CIOs along with their IT leadership teams are planning and budgeting for the year. The task is getting tougher every year with CEOs increasing putting IT budgets under a closer scanner and ever keen to allot the monies to areas directly impacting sales esp. in recessionary times. CIOs should continue to believe that IT has to be a strategic business tool and hence fight hard for their budgets. Budgeting is a defining moment in the year and hence the true character of the CIO comes into play The CIO gets judged on the type of budget he/she presents and hence its a big test. That's why I call it the Descarte`s Dilemma.

Most CIOs have a few dilemma to handle in this fast changing dynamic world when it comes to budgeting.

1) Dillema of how much to invest on revenue generating projects vs efficiency/productivity driven projects vs upkeep of existing deployment

2) Dilemma of saying No to business and yet avoid shadow IT

3) Dilemma of taking a long term view in a rapidly changing technology landscape

4) Dilemma of Line of Business folks wanting to do more with IT (projects) while the CFO/CEO wants to control the rising IT costs

Some mantras which could help your convince your CFO or CEO.

1) Let's talk business:

Let's not speak technology and speak the words the business can understand. Do you think your chances are better if you talk on how your IT investments are going to "Reduce the risk to business", "Bring in cost saving to business", "Help improve valuations of business" and "Future proof the business". One of the CIOs was smart enough to project how the IT invests would scale the business through automation vis-a-vis adding more manpower. The CEO seemed to see the point.

This is exactly what the CMO does - he projects his budgets in terms of protecting market share, increasing market share and future proofing market position. The CMO gets it easier than the CIO for obvious reasons :). So let's learn from our peers.

2) Hunt in pairs:

The process of getting your budgets sanctioned is tricky at times as you are not sure if you are hunting or being hunted. So it makes sense to team up with your Line of Business (LOB) peers and make them partners in your quest. Your LOB heads of marketing , Finance, sales , manufacturing, etc. need to be convinced of the value you get to their operations. IT needs to help them achieve their KPIs or goals. What works well is to approach the CEO with jointly owned Goals - the chances of you getting the dollars is high.

3) Darling - your figures need to speak

The CIO needs to be completely on the top with his/her numbers. This needs the CIO to do a lot of ground work in terms of analyzing information on existing skills, capabilities, manpower productivity norms, technology payback returns, IT spend benchmarks, etc. One CIO I knew would regularly calibrate the cost of outsourcing the entire operations vs doing it in house. Another CIO was making his case on the saving accrued due to the previous year IT projects and making a near demand that the savings be ploughed back to fund IT projects. Clearly the CIO needs to put in processes to measure all activities under his control.

4) Demon of shadow IT

Shadow IT is one of the most feared threat for a CIO. Budgeting is the right occasion to convert this threat into an opportunity. Consolidate and analyse all shadow IT projects and present them as genuine needs which need to be taken up. One CIO just had to take the dump of a report from the ERP on spends on IT vendors working for marketing over the last 3 years and how these isolated developments lead to a broken customer experience. His budgets went through unquestioned.

5) Evangelise all round the year.

One of the key CIO role is to be tuned to the strategic directions of business and scan technologies which add value. The CIO needs to constantly evangelize and have regular conversations with the CEO/CFO on relevant emerging technologies. The CIO needs tp keep updating the CXOs on the progress on the proof of concepts and experiments. Having the LOB managers involved in the POCs helps. There are a few CIOs today who are betting on Artificial Intelligence becoming mainstream in a few years and have initiated pilots. They regularly take their CEOs to technology conferences, invited them to look at the lab results, presented the feedback from Businesses participating in this, etc. Wouldn't the budgets for such initiatives get passed when the time comes ?

While these are few things which come to my mind, there would be many more tips which can come from your end. Pl. do contribute in your comments and lets have a exhaustive list here. We can jointly evolve on the mantra to successfully get our budgets sanctioned.

Thanks for stopping by

Cheers

Deepak Bhosale