The Six Winning Secrets of Project Funding
Psst. Want tips on how to persuade your organizations CFO to green light an expensive IT project? Okay. Lets start with a quiz and only those who pass get to read the tips (scouts honor here):
True or false?
▫ IT carries the day. (Dazzle the CFO with promises of IT glories and your funding is in the bag.)
▫ ROI sings. (Always throw ROI projections in the CFOs face; those types get off on such numbers.)
▫ Never survey inhouse customers about their needs. (You dont need support from constituents to get funded, in fact they just bog things down.)
▫ Always think big. (If the CFO asks if the project could be done in incremental steps, laugh in his face. Its all or nothing, baby!)
▫ The business doesnt matter. (Dont sweat tying IT back into the business fundamentals.)
Just in case you missed it, every statement above is false. In fact, wildly wrong in an economy where harried CFOs are double-checking where each dime goes. Yet, what is shocking is just how many CIOs are still presenting funding requests that miss the mark on every possible level. Getting projects approved isnt rocket science, but youd be surprised how often IT ignores all the fundamentals, said Tony Fischer, CEO of DataFlux, a data integration company that is wholly owned by SAS.
How did you score on the quiz?
What underlies this admittedly facetious quiz are some very harsh realities and the first is that: CFOs dont believe ITs estimates, they too often have seen IT fail to keep its promises, said Dan Galorath, founder of Galorath Inc., an El Segundo CA-developer of software tools for estimating costs of IT projects. He adds, Credibility is the big issue for CIOs.
Another big problem: ROI projections for IT projects have rarely panned out, said Johanna Rothman, author of Manage It! Your Guide to Modern, Pragmatic Project Management. According to Rothman (and this idea is huge) CFOs just close their ears when CIOs prattle about ROI because so many times in the past those projections amounted to nothing. Its impossible to honestly forecast ROI on IT projects. Accept it, said Rothman who acknowledges that CIOs root their entire argument on ROI projections that probably will do no good at all. CFOs wont believe you.
Psst, Over Here
So, if these are dead ends, what are the secrets to fast tracking IT projects?
Experts share the scoop:
1. Go in with your IT expenditures benchmarked against your peers, advises David Ackerman, IT practice leader at consulting firm Hackett Group. Of course, do this only when your firm is under investing, but if there is a disparity between what your organization is spending on IT and what competitors are spending, CFOs will take notice and that alone may nudge them nearer approving IT upgrades.
2. Document benefits from past IT expenditures, continues Ackerman. Go into a meeting with the CFO with reports that show concrete gains from previous programs approved by him (or his predecessor). That track record shows you arent just blowing smoke, that in the past you have delivered results. Highlight where IT spending delivered business benefits. Thats really what CFOs want to see.
3. Be ready to start small, adds Dino Bozzo, president of Konverge, a Toronto-based software developer. We are doing pilots, prototypes, sometimes even introducing a smaller feature set at a projects start. That is how to win funding today.
If the CFO wont approve a company-wide upgrade, how about a pilot in the
4. Go in with a firm, fixed price from outside IT vendors. Yes, many are reluctant to offer that degree of specificity but, said Shane Aubel, partner in Accent Global System Architects, an IT consulting firm based in
5. Figure out who the project will directly benefit and get their support. That will give you a real shot at winning funding, advises Rothman. Go into the CFO with support from, say, sales or any department that has already agreed it sees the benefits it will get from the proposed IT program and you are almost at the finish line before you get started.
CFOs can easily diss IT, but they tend to listen attentively to business units. Gain an ally and this fight is so much easier to win.
6. The last step? Once a project is green lighted by the CFO, on a regular basis report back to him with information that shows progress and concrete benefits, urges Rothman.
So much IT seems to fall into a black hole as far as CFOs can tell," urges Rothman. "Make the benefits of this project clear to the CFO and it will pave your way for funding for the next project.