How to Get More Money in Your Budget - Page 2

Feb 21, 2007

Allen Bernard

The approach Gillespie advocates is to get others in the organization to do your pitching for you. Create a broad-based coalition among your peers by spending time in their domains; find out what they need, want and desire from technology and then have them pitch the company's president for those things.

"You have to create the vision of where you want to take the company from a technology perspective but you have to sell it indirectly to all the business units and have them champion it and see the vision as well."


Anther approach, one advocated by CE's Scavo, is to apply tried-and-true financial metrics to your arguments. He likes something called EVA (economic value added). EVA is a financial model that spells out the financial benefits of corporate investments in financial terms.

If you think a new CRM system will generate big returns, prove it. Don’t just tell your bosses they need to do it because the competition just did.

"And that can be particularly effective because it's expressing the benefits in language that the decision-maker typically understands and uses for other types of investments in the organization," said Scavo.

It's also important to understand that IT requests, while often being made for the benefit of other departments, are up against other requests from those same departments for more funding. Hence, combining Gillespie's use of the broad-base of support approach with EVA and other approaches is another option.

The Advantage of Risk

For former CIO Marty Mercer, also a partner with B2B CFO in Denver, an effective tool was the risk-approach. It is kind of a scare tactic but if your company is indeed putting itself at risk — regulatory, security, or competitive — then by all means, play the card. If it is not, then don't. Use another approach.

But the tool Mercer prefers is to educate decision-makers to the importance of IT to the business. This way, future efforts are easier and better understood by those holding the purse strings.

"And I think if you approach it from that perspective you really start getting yourself in a safe harbor; getting yourself into a place where the arguments of getting more money end up becoming easier and easier because what happens is the mindset of the decision-makers changes from that of being 'Okay, this is cost overhead that I have to contain', to 'Okay, this is an opportunity for us to generate more revenue using information technology'," said Mercer.

Another former CIO now with Tatum, LLC, an interim CIO staffing firm, Bill Huber has been on the inside of these approaches for years. He sees IT as having a credibility gap that must be overcome before any meaningful re-instatement of IT as a department that drives the business forward instead of just being a cost-center.

If you are up against this type of perception at your firm, then all of the above methods will help. You also have sell IT's successes at every opportunity — you have to demonstrate IT's value to company.

"More importantly it goes to the strategic issue," said Huber. "If IT is only providing support services … then the budget should be cut because at that point it's turned itself into a commodity. So, the key is to make IT not a commodity, but to make it a core part of the business."

To do this, talk about the ways in which IT can and does make a difference. And stay away from technology for technology's sake type of arguments.

"I always view myself as the advocate of the IT team," agrees B2B's Mercer. "So my job is to go in and say look at what a great job we're doing."

Day's End

Of course, all the best advice in the world is just that, advice. You have to figure out what is going to work with your decision-makers and apply it. Not everyone is going to respond to the same approach; it's not used-car sales but it is sales, so do what works.

"It's a holistic approach," concludes B2B's Gillespie. "I think you need to do a little bit of everything."

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