Up until the turn of the century, IT was something of a mystery to many organisations.

It meant that companies prepared to slash marketing or product development budgets during tough times were happy to keep technology investment more or less the same. In the 1991 to 1993 recession, for example, IT was relatively protected from budget cuts.

Not any more. A victim in a way of its own success, IT is now seen as part of the mainstream business.

‘Every corner shop now has a PC; technology runs all the way up to big private and public sector organisations, where it is a part of the fabric,’ says Robert Chapman, managing director of training firm The Training Camp. ‘Compliance also means what the chief information officer (CIO) does regarding use of information is absolutely vital to the board.’

Even non-technical organisations, such as Arsenal Football Club, now agree that technology is crucial – see box, right.

‘If our network goes down, we have a lot of problems,’ says the club’s commercial director Adrian Ford. ‘IT is very important to us. On a match day we totally rely on the network and applications to help service our customers.’

Technology is crucial, then, but maybe not that favoured. The past few years have seen budgets slashed or radically restricted, as the dot com bubble and associated dip in the markets have led to a general dissatisfaction with the technology hype cycle.

‘The IT budget in the past three to four years has all been about maximising efficiency and minimising cost, and there has not been any slack in the system,’ says Neil Macehiter, research director at analyst Macehiter Ward-Dutton.

The situation probably will not last for ever, however. In November, researcher IDC released data suggesting a six per cent rise in US IT budgets next year, in sharp contrast to its earlier prediction of flat spending for 2007.

An additional Accenture survey of almost 900 CIOs suggests purse strings might be slightly relaxing: some 40 per cent of respondents say that overall IT budgets have increased since 2005 – though 20 per cent say they have seen cuts and 40 per cent have witnessed no change.

Technology investment follows clear cycles – and in one way, the emphasis on cost-cutting and sweating investment during the past few years has been a rational reaction to earlier expenditure. Now may be the sensible time to expand.

‘While many organisations made massive IT investments in the late 1990s, followed by a period of rationalisation and consolidation, we are now on the brink of yet another cycle of IT investment focused on initiatives to grow and differentiate businesses,’ says Accenture global managing director John Kaltenmark.

Macehiter agrees: ‘We are definitely seeing businesses looking to the IT organisation to help innovate around areas that will really differentiate them.’

But is the challenge to simply get more cash? Or to better use your existing budget?

There are still clearly many ways a canny IT director can squeeze more out of what he has. Disciplines such as service management, off the back of the IT Infrastructure Library (ITIL) process for example, are seen as key to getting a more business-oriented IT delivery function started.

Many IT leaders have been looking to trim operational expenditure through focused relationships with key suppliers and outsourcers, as well as postponing technology upgrades until absolutely necessary.

But if your emphasis is to secure more cash for your department in 2007, as opposed to making even better use of what you already have, Computing Business has talked to the experts to define five ways that could help secure an extra few percentage points in the next planning round.

Strategy one: Ensure IT is aligned 100 per cent with the business

It is amazing that in 2006 we still have to rehearse such an argument. But if technology is not fully aligned with the business, then all your efforts might be in vain.

Gary Barnett, analyst with research group Ovum, says your mission must be identical to the company’s mission.

‘If you are in automotive, say, then your mission should be to help the company build better cars – at lower cost and more of them,’ he says. ‘Just describing your IT perspective in terms that will means something to the shareholders can make a powerful difference in the way you and your team think, and are evaluated.’

Macehiter says CIOs need to be fully engaged with the business to understand the key business processes and outcomes and to get away from IT always being in response mode.

‘And never couch the conversation in terms people cannot understand, such as service-oriented architecture. It must be in terms of business impact,’ he says.

Strategy two: Win influential friends and keep them

Your first target should be the man who signs all the cheques. ‘It is very important to make friends with the financial director or chief financial officer (CFO),’ says Ovum’s Barnett.

As one finance head puts it: ‘If the CFO thinks you are taking a business-like approach to your investment plans they are going to be a powerful ally.’

Barnett advises the budget-seeking CIO to then link up with the chief operating officer (COO). ‘COOs are powerful beasts, and of course they often end up being chief executive,’ he says. ‘In any case, if the COO thinks that you “get it” in terms of his or her agenda, and you are someone who can be relied on to deliver, you will have a much better time in the organisation.’

Philip Carnelley, senior research advisor at The Hackett Group, an organisation that tracks the link between IT spend and organisational effectiveness, says it is important you provide the right data to influential people at the right time.

‘Track metrics meaningful to the user and encourage them to track things such as amount of time employees – for example, in finance, spend on analysis, rather than on basic transactional activities as a result of IT-enablement,’ he says.

Strategy three: The effective internal marketing of IT

Internal marketing – proving that technology is as an asset and worthy of respect within the business – is a vital, but for some reason unpopular, part of the job.

Ovum’s Barnett says CIOs should begin their marketing strategy by being clear about the parts of IT that are essentially utility or commodity.

‘Let’s face it, that is most of it,’ he says. ‘Then identify the bits that really can make a difference. Sell your teams expertise, focus on delivering a series of small successes and celebrate them.’

Barnett cites the example of one of his CIO clients, whom he says talks about the ‘beaten dog syndrome.’

‘His board had been let down so many times by IT that it flinched whenever the IT guy stood up. The CIO’s approach was to put together a series of small tactical projects, delivering them one by one on time and to budget,’ he says. ‘Gradually the board began to trust IT again, and became more and more willing to support larger projects. Now he tells me these guys are eating out of his hand.’

Carnelley agrees that technology leaders should treat the rest of the business as a customer. ‘But most IT organisations still do not do that,’ he says. ‘They concentrate on the invisible things, making sure the network stays up and that everyone has a laptop. Much more effective is to go to the business and proactively ask what needs to be done: here’s a solution to your business problem, or how can we help?’

Strategy four: Identify and implement projects that will save the business money

‘Cost-cutting is not just about your budget, you can also help other people cut theirs,’ says Barnett.

But too much emphasis on cost-cutting can also rebound, says Carnelley. ‘Cutting everything to the bone will not solve all the company’s problems,’ he says. ‘The trick is to spend a bit more to improve things, not a huge amount. IT needs to be an effective as much as an efficient service.’

His team’s research suggests it is those companies that provide reasonable access to IT that tend to perform better overall, with what Hackett calls world-class organisations tending to spend seven per cent more than their less effective competitors.

But it is also important that CIOs make clear that any such extra budget is not available for technology’s sake but for the sake of the business.

Philip Raddon, group IT director at Kingston Communications, says the managing director has to understand that he or she needs to spend a certain amount to make their ideas work, and that responsibility for making a business case should not always lie with the IT director.

Strategy five: Get lucky

Or rather, establish such a strong bond of trust with the wider organisation that your team gets picked to lead a business transformation if the company decides it is the right time to launch a major IT investment.

‘It could be that what can make a real organisational-wide difference is the right stable, technology platform,’ says Macehiter. ‘If this is established as a need it should be pushed for as an investment priority.’

These five techniques may not always work – but as we head into 2007, they must definitely be worth evaluating.

Maximise your budget: www.computingbusiness.co.uk/2172797

Case study, Arsenal FC: www.computingbusiness.co.uk/2172799

Case study: Kingston Communications: www.computingbusiness.co.uk/2172800