IT can always use more money to build better systems, increase reliability, improve speed, and deliver new features. However, many companies see IT as a major cost center and many IT leaders don’t do enough to prove the business value of their work. This creates a dynamic in which getting approval for the IT budget becomes extremely challenging. Some CFOs will balk at any increase in budget and look for every way to cut costs, even at the expense of system reliability and performance. This is a dysfunctional way of operating and IT leaders must do more to ensure that the relationship between business and IT is strong.
Build a better relationship
IT leaders shouldn’t only go to the CFO when they want something. Instead, they should be constantly working with other business executives to develop strategies that use IT to drive business goals, improve efficiency, and meet the demands of end users. When the CFO has an active working relationship with IT, they will better understand why they are asking for resources and be more likely to grant the request. The CFO will also likely have insight into how to improve efficiency within the IT organization and optimize the resources given to them. The most effective relationships should be mutually beneficial.
Make the business case
No CFO will grant a budget increase unless they can see a clear business case for doing so. It is the IT leader’s job to gather data and develop arguments that convince the CFO in terms they can understand. This means that IT should be collecting data on performance and reliability, user satisfaction, costs and revenue, and other key business points. This helps show why getting money for transformation and improving performance is critical to driving business goals. Every request should be framed not just in terms of the technical outcome, but in terms of the outcomes for the business and end users.
Stress the importance of innovation
Not every CFO understands that IT is the driver of innovation and competitive advantage in the modern enterprise. That’s why it’s critical that the CIO show them how innovation and transformation can dramatically change the way a company does business. Technologies can allow companies to offer new products, capture new markets and lower costs. In many cases, this can mean the difference between a company surviving or being overtaken by a more nimble competitor. IT leaders need to make sure that the CFO understands that not investing in IT is incredibly risky and will likely cost the company many times more in lost revenue.
IT leaders must understand that they are an integral component of the business and all of their activities should be directed towards driving business goals. If they approach budgeting with this mindset, they will be in a much better position to negotiate with the CFO and prove to them that their requests are reasonable and necessary. By developing strong working relationships with business leaders and framing their requests in terms of how they help the business, IT can get the resources it needs to improve service and innovate. This direct approach enables IT to react swiftly when the budget is approved so they can begin to implement changes with speed throughout the enterprise. In the end, IT’s transformational initiatives benefit the entire organization’s bottom line by enabling the company to stay at the forefront of technological innovation in its respective industry.
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With over 15 years in financial management experience, Rich Carroll joins WGroup after four years at Quintiq, where he served as CFO and a member of the Quintiq board. During his tenure, Rich was also instrumental in leading FP&A and Treasury through a period of growth in which revenues and valuation nearly tripled, leading to a successful sale of the firm to Dassault Systemes.