Getting a CFO to Say Yes to IT ProjectsBy Elizabeth Millard Print
How to bridge the gap between the budgetary needs of technology projects with the funding decisions your CFO envisions for the business.
It’s a contradiction that’s tough to handle for many IT managers and CIOs: The budget is getting leaner, yet demand for more technology and services keeps increasing. Although new strategies and equipment can improve the situation, tech executives might find that when it comes to infusing their pet projects with budget resources, the CFO balks.
Most likely, getting a rejection isn’t just a result of limited funds, but also the outcome of poor communication and badly handled proposals, notes Greg Baker, CFO of technology provider Logicalis.
The firm has developed a request rating calculator for its site, so users can determine how much weight a certain aspect of a project will be given by a CFO. For example, if the initiative is a directive from the CEO, it will rank high in terms of getting funded. But if the project has no timeline in terms of completion and is therefore not seen as urgent, it will have less chance of being seen as necessary.
In general, a CIO or IT manager should be able to articulate what type of effect an initiative will have on the security of the company’s applications or operation, how much the initiative will increase productivity, whether customer service levels will improve, and what the impact could be on strategic, tactical or operational goals.
Over the past few years in particular, much discussion has centered around the issue of technology executives creating more alignment with other parts of the business, and most importantly, being able to describe projects and outcomes in “normal” language rather than tech-heavy jargon.
When it comes to getting CFO approval, this is especially important, since eyes tend to glaze over when complicated technical details are introduced. In other words, CFOs don’t want to know how a new network switch operates or whether an appliance is well-suited for upcoming standards that are being put in place. They want to hear how it will save money, make customers happy and not add to IT headcount.
In today’s economic climate, most projects that get approved won’t be large, new projects, but rather smaller tweaks that can improve efficiency, says John Blyzinksyj, senior vice president at Patni Americas, provider of IT services, product engineering and infrastructure management.
“A major issue for CFOs used to be SOX [Sarbanes-Oxley] compliance,” he says. “But, although that’s still a concern, right now they’re more focused on conserving cash, reducing inventory and looking at any IT project that helps improve the efficiency of the supply chain.”
CIOs and IT managers who are seeking additional budget monies should also keep in mind that most budgets are not expanding, so any funding would have to be taken from other departments. If that’s the case, Blyzinksyj notes, the technology executive had better be able to justify precisely why the initiative is needed, and what the outcomes will be.
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