CIO Services: Four IT Budget Lessons for the C-Suite

CIO Services: Four IT Budget Lessons for the C-Suite | Loffler

You’d be surprised to learn how many IT departments operate without a budget. Or how many organizations are hesitant to invest in a strong technology infrastructure.

Maybe you work somewhere like this?

Leadership is vital to getting technology on the right track. But often, there’s a disconnect between the executive level and the IT department.

My role as a CIO (Chief Information Officer) consultant is to work with leaders who make IT decisions. I’ve seen executives go from questioning the necessity of IT purchases to realizing the value of spending well-thought-out dollars on IT advancements.

How does this happen and what advice can be offered to organizations facing a disconnect between the executive level and IT?

Read the Case Study: Working with Loffler to Develop an IT Strategy

Lesson 1: Make Peace with Your IT Budget

CFOs care about the financial health of their organization. It’s their job to work with numbers and consider the total cost of ownership. They are thinking "if I spend that money now, what am I preventing or mitigating later?"

To many CFOs, controlling dollars may mean not spending a lot of money on IT. This short-term mentality of stepping over dollars to pick up dimes can inadvertently hold an IT team back. It also sets the tone for finding fixes at a lesser cost.

Ironically, saving in the short term can lead to spending more on IT in the long term. A $10,000 server upgrade may have a CFO wondering why it would cost so much. In this case, the CFO needs to understand the amount of money needed to improve an IT infrastructure and why it costs that much.

Many IT people aren’t experienced in making a business justification at the executive level. It’s not enough to say you need something. You need to outline potential outages and the risks associated. As a CIO consultant, I help organizations make these distinctions.

C-level leaders sometimes wish they didn’t have to spend money on IT, but they do. It can take time and a little help for decision makers to figure that out and get comfortable with it.

Lesson 2: Find the Root Cause, Not a Band-Aid

Let’s look at a common problem caused when a company is hesitant about spending money on IT: An organization chooses not to upgrade a server, and then it has a major failure.

Instead of upgrading, the organization repeatedly fixes their old server, even though equipment is dated and unsupportable, knowing they have an internal IT staff capable of nursing it and keeping it alive.

This scenario means pouring money down a hole. Patching it can mean duct tape and baling wire, meaning over time, IT can become a massive, confusing animal. You become more and more dependent on your internal IT staff to know how everything fits together. As IT people leave, knowledge is not adequately transferred. Failures occur that no one knows how to fix.

An old, unsupportable server should be replaced. The risks of not addressing this underlying problem often result in a critical outage, meaning downtime and the organization loses productivity.

I see it all the time. No email. No internet connectivity. No work accomplished.

Technology failures have dire impacts on businesses. How long can a business afford to be down? A server is harder and more expensive to recover than it is to upgrade proactively.

Instead of Band-Aids, find and solve the root cause of IT problems. Think of IT as the brain of an organization. It will keep everything else running, and the organization can’t operate without it. Use technology as a competitive advantage by stepping back and looking at a holistic IT strategy.

Lesson 3: Stay Ahead of the Curve

In order to run day-to-day operations, IT infrastructures have become more complex, involving networking, storage, security, disaster recovery, data and collaboration tools (and that's just a sampling). No business has these components in place simply because they're fun. Each exists to meet a business need.

IT components need to be considered not in terms of what you’re dealing with (data, backups, emails) but in terms of how you’re going to use your IT infrastructure (to collaborate, to report, to improve, etc.).

There’s a reason IT is called information technology.

IT at its finest is about delivering information and supporting an organization's mission. IT is not about keeping the green lights blinking green.

When many organizations recognize they need to outsource IT, they picture having someone maintain their server. It's important to also recognize that many inefficiencies can be solved with technology, including time wasted on repetitive processes, troubles getting data from system A to system B, errors caused by manual entry and not being able to find information. Staying ahead of the curve means fixing these common problems. A well-planned technology strategy can help do that.

I work alongside organizations to help them stay ahead of the curve. Staying ahead of the curve requires proactive strategy planning. You want to set yourself up so as your industry changes, you can adapt as quickly as possible.

Lesson 4: Work with the Right CIO Services Partner

Large enterprise companies can afford to employ their own CIO strategy expertise in-house. But that’s not every organization. A small or medium-sized business (SMB) may not be able to have all the expertise they need in-house. They need a partner who understands strategy, budgeting, planning and communications.

Having that partner by your side can aid in executive-level understanding when big decisions need to be made. Plus, if something bad happens, like a ransomware attack or a network outage, you have someone you can rely on to respond.

The right partner understands your business and has the expertise to help.

Contact Loffler for CIO Services

Read Next: How to Avoid IT Strategy Failure

Chad Schwinghammer

Chad is an IT Strategy Consultant at Loffler Companies. He has worked in the IT industry for over 25 years, spending 15 of those years in IT consulting. He owned his own IT services company specializing in managed services, small business projects, professional services, IT strategy and planning before coming to Loffler in 2012. Chad has worked with many companies to develop their IT lifecycle and specializes in strategic planning and tactical implementation. In his free time, Chad enjoys traveling with his wife and two sons, playing tennis and reading nonfiction and history books.

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