Manage the Budget

Identifying core processes and centralizing tech decision-making are among the keys to success.

5. MANAGE THE BUDGET At big companies, it's standard operating procedure for a CIO to sit down with the chief executive or chief operating officer and discuss the I.T. budget for the coming year. The same thing should happen at midsize companies, according to Curran. Cost-plus budgeting—in which the chief financial officer calculates a percentage increase over the previous year and "just hands the head I.T. guy his budget"—is a bad sign. While that calculation needs to be done, it is insufficient without a separate bottom-up analysis, Curran says.

CIOs should also have the discipline to do periodic checks of their I.T. budgets during the year, perhaps on a quarterly basis. The point is not just to see whether expenses are under control. It's also to determine if modifications are needed to support new needs that have arisen on the business side.

"At the end of the day, I.T. is a support organization," says Gabrielle Wolfson, CIO of $433 million (2005 sales) Par Pharmaceutical in Spring Valley, N.Y. "You try to work up front, but nothing is perfect."

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