Fighting for IT funding

Learn the language of finance.

Learn the language of finance.

IT directors do not need to be told that their budgets are under pressure, or reminded that more companies are seeking to make IT accountable. What is new is the way some are fighting back, and with surprising results.

Many board officers see IT as a bottomless pit, where money is spent with no tangible result. But it does not have to be that way.

US IT directors are finding that rather then being accountable to the chief financial officer, the chief information officer's role is evolving so that they sit alongside the finance department, learning the language of finance while grappling with concepts such as customer service.

The closer relationship is largely in response to the growing slice of corporate capital budgets consumed by IT: some sources believe it now accounts for as much as 50%. Corporate America understands that IT cannot be treated as a special case, exempt from the usual business rules governing the justification, budgeting and monitoring of capital investments. Neither can it be relentlessly targeted for arbitrary budget cuts.

Some IT departments are giving back their budgets and offering to compete for fresh projects, acknowledging that to become a real service to the business IT must act like one. It must start by managing its most costly asset: people.

Some CIOs are seeing real value in tools such as performance dashboards. These provide project leaders with vital information about how projects are progressing, early warning about potential conflicts or difficulties, and continuous updates about each employee's performance. These are the basic tools for ensuring that internal customers are fully appraised about how projects are performing and publicising milestones achieved.

This approach is producing extraordinary benefits. It shows who are the best performers and which teams provide the best value for different types of project. It enhances the IT department's status, along with that of its most valuable team members, and it acts as a natural laxative in inefficient departments. Those who do not wish to respond to the new order are quickly identified and replaced.

We are seeing genuine interest in finding ways to integrate IT as part of business strategy, prompting high-performing organisations to question how they manage the effectiveness of this costly resource. UK IT departments may not yet be as aggressive as those in the US, but it cannot be long before the lessons filter over here.

Ayman Gabarin is regional vice-president at business process automation supplier Changepoint

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