Tips for the CIO: Managing the Budget and Spending
Similar to other department heads, the CIO has a budget and needs to closely manage spending. They are responsible for a variety of projects that can impact the entire organization and directly create (or reduce) revenue. Here are some best practices for CIOs that want to manage spending while running an efficient and customer-centric IT department.
It’s all in the Planning
Planning is crucial because it forces the CIO and their team to review the important “why” questions:
- Why are we spending on platform X?
- How could we better allocate dollars in order to streamline our own processes or generate increased revenue?
- Where can we implement a new platform that will improve the customer experience and provide us with long-term profits?
- How can we use smart outsourcing strategies to reduce costs?
- How can we do this project cheaper/faster and still produce the desired results?
Answering questions helps to frame the “needs” and then guides the choice of expenditure on certain solutions.
Also, don’t hesitate to bring other department managers into the planning conversation. You should conduct meetings with marketing and sales for example to ensure solutions are helping them to improve the customer experience, but you can also involve finance to help you run numbers to check the cost-to-value of certain implementations you are considering.
Conduct Trial Runs – Implement Change in Phases
For example, if you are considering moving applications to a cloud architecture, then pick one and utilize it as a trial run. After moving, then showcase the efficiency, scalability, and cost savings associated with running the application in the cloud, and then extrapolate those numbers to include a larger-scale migration of other remaining applications.
A phased approach can also help you to spot issues before you commit too many resources. Consider a situation where you move some sales staff to a new CRM solution, but you encounter significant problems and under-delivered functionality. You can switch to a new vendor before moving all of sales and customer service to the CRM platform, allowing you to save costs.
Prioritize Projects for Maximum Gains
If there are fundamental problems with how IT work is internally managed/processed, then consider first allocating spending on fixing those issues. Perhaps this involves strategic personnel changes or new cloud-based task management tools. Improvements in how IT operates will then allow other project implementations to proceed efficiently.
Next, build a priority order based on the ultimate impact the new solution/integration/platform will have on the customer’s experience and their willingness to spend money. Will an improved CMS platform allow you to present engaging content to customers while giving sales people instant access to the latest materials? Are you lacking in how you use data to find the best way to serve customer needs? Then consider a BI platform that leverages Big Data and will help you find new insights.
Managed Services and IT Outsourcing
It’s also important to remember that while companies are relying on managed services, they tend to act as a complementary part of IT, instead of an actual replacement. CIO’s should view managed services as a smart strategy, where they offload some of the work in managing data migration for example, and instead allow IT staff to focus on other strategic projects. For example, they can then focus on designing new customer applications while working with multiple departments within the company. It can pull IT out from the “behind the scenes” role into a group that directly drives revenue and customer satisfaction.
Moving to managed services has evolved, with IT not only looking for lowered costs, but also expecting gains in reliability, efficiency, and compliance issues through the use of managed services.
Working with a qualified IT consultancy can help to keep costs under control, especially in the design and implementation stages. IT consultancies with experience with various vendors and platforms such as BI, CRM, CMS, and others will know how to pair together needs/wants with the right vendor, and will extract maximum value from every implementation.