In this life, one thing counts

Money, or the lack of it, is what makes budget proposals a gruelling ordeal for IT directors. Mark Lewis explains how best to...

Money, or the lack of it, is what makes budget proposals a gruelling ordeal for IT directors. Mark Lewis explains how best to pick the pockets of your CFO

A large proportion of the country's IT chiefs will be submitting their budgetary proposals in the coming weeks. Only the most naive among them will expect their caring, sharing boardroom to start peeling off £10 notes to pay for all the projects that got bottlenecked behind the corporate millennium fix.

It is far more likely that the omissionof exceptional monies to cover year 2000 remediation will mean budgetary allocations decrease. That is unfortunate, because this year more enlightenedIT directors are looking to elevate the department fromservice provider to profit generator.

If you want the financial wherewithal to deliver business benefit, you'll need to show some imagination and street-smart in your budget pitch.

Cometh the hour, cometh the manoeuvrer.

Be prepared

  • The first thing to do is to make like a Boy Scout, and be prepared. "Can you get some intelligence about the applications your competitors are building that might give you a case?" asks Professor Rob Lambert of the Cranfield School of Management. With a little bit of honourable espionage, you can ascertain what IT tricks your rivals have up their sleeves and scaremonger your board accordingly. "They've got to feel the pain" that allowing rivals to steal a march will inflict, asserts Lambert.
  • Once you are wise to the competition, you need to take a good look at your own organisation's direction in order to ensure you relate everything you want to do directly to the bottom line. As Geoff Petherick, CEO of UKCMG points out, "unless you've got some business reason for justifying [a budgetary allocation], you won't get it."
  • David Masding, director of operations at the NCC, thinks it imperative that you "put yourself in the place of the people that are going to authorise the budget, and tie IT into the bottom line". Beset by competing requirements from business departments all busily name dropping market share, profit and volume, they'll need to be convinced that IT is more than a utility.

    If you are planning to set up a data warehouse for the marketing department, don't just say "we need money for a data warehouse" but point out that the project will be central to the marketing department's future success.

    And if closer alignment with the customer base is at the heart of current business strategy, now is the time to apply for the money to initiate a CRM initiative. Track costs against business processes rather than against functions, in other words.

  • Even if you are not looking to launch a major new project, but only to fine-tune an existing function, the same rule applies. Instead of talking about heightening your mobile network efficiency, for instance, Lambert suggests that you say, "We want to spend additional money because you want to improve your field sales force system".
  • We're talking communication here, not rocket science.

  • By extension, your next move, says Masding, should be to "get allies from senior management - enlist the support of those people who can influence decision-makers". If you can prove that the business is already fully engaged by your plans for the coming year, you'll do your pitch the power of good.
  • Be alarmist! Using Y2K as a lever might also help secure the funding you require. Post-millennium, the board is more aware than ever of how critical IT is to the business, and if you can reinforce that criticality you'll be quids in.
  • "Revisit what you discovered in the Y2K round of investigations," suggests Masding, "and recommend areas of further improvement."

  • When it comes to setting pen to paper, David Taylor of Certus recommends that you "involve people in your department who really understand finance. The budget is unlikely to be approved without the approval of the finance director, so make sure you have someone checking through the figures who is a wizard with figures". If people like this doesn't exist in your department, get some external independent advice before you submit your final budget.
  • Play the game

  • You should also play the budgeting game and add on a percentage you are prepared to have trimmed off. "You know that your budgets will be challenged and reduced," says Taylor, "so put some fat in. The way we budget in most organisations is a joke, but unless that way can be changed you will have to play along with it."
  • Last, but by no means least, take time out to work on the actual presentation of your pitch. "Always present it personally, but get it signed off in principle before you present it," says Petherick.
  • The words Grandma, suck and eggs spring to mind here. But you'd be surprised, says Petherick, at the number of IT chiefs who dash off a budget proposal, "chuck it in the out-tray and forget it - and are then surprised when they don't get what they asked for".

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