How to Get More Money in Your Budget - Page 1

Feb 21, 2007

Allen Bernard

It wasn't so long ago that all a CIO had to do was mention the word "Web" or "Y2K" and he'd get all the money he needed. Well, just in case you hadn't noticed, those days are over — long over.

The mantra now is "do more with less" and, for the most part, IT has responded admirably: per-worker productivity is up, communication and collaboration is easier than ever, and typical uptime is in the high "nines."

But sitting back and enjoying the fruits of this labor is hardly on the agenda. Regardless of what you did yesterday, tomorrow beckons. In IT that means more projects, more innovation, more enablement provided in less time with less cost and fewer mishaps.

As veterans of past failures (think ERP, ecommerce, CRM, etc.), from the board room on down, most corporate managers have lost their glassy-eyed rapture with the promise of technology. Today, while they may still look at IT with a bit of wonder and awe, they see it as just another department — granted one with a demonstrated ability to transform the business in ways few thought possible just a few short years ago.

And this means, like your counterparts in sales, marketing, operations, HR, etc., you, as the CIO, have to make a serious business case for justifying any increase in budget.

Today, the median IT budget is two-percent of revenues; the highest it's been since 1997, said Frank Scavo, president of Computer Economics, a research and advisory firm focused on the strategic and financial management of information systems.

According to CE, IT operating budgets also rose 4.1% in 2006 and appear to be headed for a similar increase in 2007. Good news for any IT manager but these increases do not account for capital expendatures, which means you will be able to keep past projects going, but finding money for new initatives is probably going to be just as hard this year as last, and the year before that, and the year before that.

Of course, this is all industry specific, but that is beside the point: getting more money to run your operation and fund new projects is key to keeping IT in the fore when it comes to helping your company innovate and gain market share (if, of course, that is what they want to do … again beside the point. Let's assume they do.).

So that brings us to, literally, the multi-million-dollar question: How do you approach management so that your request for more funding — either on a project-by-project basis or as a percent of total revenue — is taken seriously.

As you probably already know, there is no one correct answer to this question but there are many ways to couch your requests so they are viewed in a more favorable light.

Send in the Troops

The trick is to understand what makes your business tick, said Joe Gillespie, a partner with B2B CFO, LLC, an interim CFO staffing organizaiton. Over a 25-year career and prior to joining B2B, Gillespie served as CEO, CFO and a CIO for different companies.

Whether it's increased productivity, faster time-to-market, cost reduction, top-line growth, bottom-line growth, greater innovation, etc. all of these goals can be aided by IT in some form or another. So you have to approach decision-makers with what they want in mind, not just a laundry list of hardware and software that IT "needs" to do it's job better.

"A lot of times the technology people get caught up in the technology aspects of it and when you interject some of those buzz words people's eyes glaze over and it's more of a turn off," said Gillespie.

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