In today’s uncertain economic climate, many organisations are becoming more cautious about how they spend their money on IT. Although most businesses are not yet actively axing projects, they are starting to think about deferring investment towards the end of the year and will be closely watching how the economy performs during the next six months or so.

Such developments mean nice-to-have initiatives are rapidly becoming a thing of the past, while anything that is less than urgent has to be strongly justified.
And for the initiatives that are still going ahead, the IT leader’s focus is
strongly on providing clearer benefits and outcomes.

“When money starts to get tight, organisations tend to raise the bar,” says Graham Quint, IT manager at Tewkesbury Borough Council.

“So while a project might have got through last year, it may not this year because the benefits case has to be stronger to warrant investment. It is similar to the situation when you come to replace your car and ask yourself whether to do it this year or next ­ it is a balancing act.”

Steve Weaver, financial director (FD) at Servocell, which manufactures electronic lock systems, agrees and says expenditure is tight at the moment.

“I am only really interested in doing something new if it saves money, allows people to work more flexibly or, the other important thing, if it can ensure that the business is safe,” he says.

Deciding which projects should top the priority list requires a careful approach. Phil Dunmore, managing director of project management consultancy PIPC, says only firms that have a joined-up view of the requirements and expectations of different parts of the business can understand the demand for IT.

It is, therefore, crucial that IT leaders not only develop ­ and constantly evaluate and review ­ technology plans with each individual business unit, but that they also ensure that their plans tie in with the organisation’s overall corporate strategy.

Dunmore says the approach necessitates the creation of a clear portfolio of projects across the business and an understanding of how initiatives fit together.
“So that joint decisions ideally at board level can be made on where the bar should be,” he says.

In short, IT directors will need to act as consultants to the rest of the business. Technology leaders will assume a facilitation role and provide the necessary frameworks for discussion to help the board come to decisions about how technology can best solve specific business problems.

Useful information includes the benefits case, investment and risk profile of various technology options in relation to each proposed initiative.

Quint says line-of-business units are in the best position to determine which systems fit requirements now ­ and in the future.

“But what they need me to do is ensure that the project is not technically impossible and that what they are trying to do can be moulded into the rest of the corporate infrastructure, so that they are not sticking themselves out in an island of data,” he says.

Moreover, because individual initiatives often complement or dovetail into each other, Quint says taking a more overarching view means organisations can frequently save money on duplication ­ or even introduce a necessary infrastructure project on the back of another initiative that is easier to justify.

“It is like a jigsaw and you need to be able to shift the bits of the puzzle around,” he says.

The most successful approach that Quint has found for persuading the powers that be to part with their money is to make a joint bid with the relevant service manager, who should take the lead on the benefits case.

“It is about persuasion,” he says. “And a business case is really just a formalised aspect of persuasion.”

To be persuasive, IT directors must address their target audience with appropriate language and keep their explanations simple.

“IT is my specialism so it is unfair to expect everyone else to know about it too ­ if they started yapping away about theirs, I would glaze over pretty quickly as well,” says Quint.

“But it is easy to forget just how much you know, so you need to be able to show people things with almost a ‘ball and stick’ level of diagram.”

Servocell’s Weaver agrees on the need for clear communication, but also says
IT directors should think of FDs as more than just the accountants who add up
the numbers.

Instead they should ideally be viewed as people who can help with the process of formulating a business case.

“You have to work with the FD not against him as he is the key to getting what you want,” says Weaver.

“FDs are there to help ensure that it makes sense to do something from an overall business point of view, but it is a lot easier if you have their backing because they hold the purse strings.

So you can win the support of the managing director, but if the FD is not convinced, it is unlikely that the MD will put their neck on the line on your behalf.”

Weaver recommends that IT leaders create a business plan that includes four or five initial bullet points which outline possible benefits.

The short plan should be followed by another page that explores benefits in more depth, but also includes upfront capital costing, information on running costs and likely timescales for payback.

“If you produce a 15-page document, it is unlikely to be read because if you are in a board meeting and there are lots of things to discuss, a detailed document on IT issues that no one understands will not cut it,” he says.

“As with anything, the plan is about persuading people and getting them
on board ­ so it has to be presented in a language to which people can relate.”