Having trouble getting IT initiatives approved?

I was talking with a company CFO about his IT challenges and one of the points he made rang so familiar. It’s something I’ve seen throughout my career.

His comment was, “I’m actually eager to spend money in IT, but it is frustrating when our IT Director asks for approval to hire a new employee or to buy new technology but doesn’t provide any justification for doing it.”.

This is something that occurs all too often.

Another comment I’ve heard from IT managers and CIO’s throughout my career is, “The company won’t spend any money.” or “I can’t get my projects funded.”

Interestingly, all of these comments are related and arise from the same issue.

IT managers who come from heavy technical backgrounds aren’t always taught the need to justify new technology expenses. A key initiative may appear to be totally obvious to them that the company needs to do something, but I can tell you that it is definitely not obvious to most CFO and CEO’s.

I can also tell you that I’ve never found it terribly difficult to get my IT initiatives funded. There are two very simple reasons for it:

  1. I know that every initiative needs to be cost justified so they are.
  2. My initiatives are always closely tied to the company’s needs and provide quantifiable business value.

Number 2 is not something I say lightly.  I make it a point to develop strategies and budgets that support the business needs and objectives of the company. I also communicate these plans to senior management of the company and gain their endorsement by validating that “these are the things we should be doing”. More importantly, I show the business value that the projects will deliver.

Cost justified initiatives that have understandable business value usually get the approval nod.

Senior managers have one goal that’s well above any other and that is to achieve the financial commitments made to their Board of Directors and stockholders.

Unexpected spending runs contrary to this primary mission. Most of us have a certain amount of distaste for surprises and senior executives are no different.  It’s a lot easier to add new staff when your operating budget anticipated the possibility of such a need and is included in the budget numbers.

I never recommend hiring a new employee unless there is ample justification. In fact, I’ve been known to be more reluctant to hire a new employee than some of the senior managers.

The key message here is that when you ask for something that’s not budgeted and planned for (and this will be rare in my case), my senior management team knows that I’ve thought through the issue and have plenty of justification (cost, benefit, etc.) that warrants the additional expenditure.

In addition, they know that if it’s above the budgeted operations plan, I’ve determined how to make up for this extra expense so I still make the plan.

Managers who don’t anticipate the “Tell me why” comment from their CFO or CEO will have difficulty in getting what they want.

It’s not the senior manager’s job to know why we need more IT staff or new technology. That’s the senior IT manager or CIO’s job, and those who can’t articulate the justification are the ones who make statements like, “The company isn’t willing to spend money in IT.”

I’ve joined companies where the outgoing CIO told me that he could not get anything done for lack of money. All I can say is that I never found it to be difficult at all to get those same senior managers to fund reasonable initiatives that helped the business.

The scenario I usually find is that there is plenty of money to spend on the right things. The problem is that the former technology managers were spending too much for things that were not critical to the business or that did not add real value. They were buying technology, , , not approaching technology as a business manager would and buying only what’s needed to help the company be successful.

If your senior management team isn’t willing to fund your requests, , , stop for a moment, step back and take a hard introspective look at the situation and ask yourself, “Why is this the case?”.

Be objective and remove any self imposed desire or emotion from your thoughts. Put yourself into the position of the business owner as if the money were to come right out of your own pocket. Would you still be doing all the things you are spending money on or would you revise your initiatives and do something different, , , especially, if payment came out of your own pocket?

I’ve performed due diligence on IT organizations of companies we were about to acquire and I’ve conducted IT assessments for many companies in a consulting role. It’s amazing how many times you hear comments like “reluctance to spend on IT”, “can’t get funding for our IT projects”, etc.

When I hear these things, I take a very close look to determine if the IT organization is really in sync with the business “owners” (senior management team). In most cases, they are not.

It’s not that IT managers do not want to do the right thing for the company. It has more to do with background and experience. For example, if a young CIO comes from a predominately network and infrastructure background he tends to focus in improving the network and infrastructure. All the while, the real problems may be with the business applications or Help Desk.

We tend to focus on what we know. Unfortunately, most of the people that are promoted to IT manager haven’t really been exposed to techniques of how to manage a business effectively. They are predominately technicians by trade, not business managers.

When you become a manager, it’s more about the business than about the technology. Technology is the means of making great strides and improvement, but without a real business need the best technology solution can be a waste of money.

The next time you prepare to ask for more money for more staff or new technology, ask yourself these questions so you know the answer when your CFO or CEO asks you:

  1. What is the benefit?
  2. What is the cost justification?
  3. What will not making this investment do to us?
  4. Do we have to make the investment now or can we wait?
  5. Is it budgeted?  If not, why not?

If you have solid justification that meets the needs of the business, you will probably find yourself getting more of what you ask for.

Create a track record of making wise investments in the initiatives you recommend and getting tangible results from them and you will find the scrutiny and analysis of your recommendations become less and less. It’s a matter of trust and knowing that you only do things that truly benefit your company.

It’s all about earning trust and respect by producing positive results.

One response to “Having trouble getting IT initiatives approved?

  1. rdwollenberger

    OK, I would like to think I understand this. Although my non-profit is facing a large deficit this year our board just approved design and implementation of a new system to run our business. I’ve been working on this for over 18 months myself, and with a team of 10 others in the organization since last November. Now we’ve been approved to for over $600k for this new system. It will change the way we do business, and make us better, more responsive, and able to do more than we can now.

    It also represents the largest project of my professional career, and I’m pleased to have a consultant to work with us who has been through these before and help me learn along the way. We’re all convinced we’re making a wise investment…

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