Psst. Want tips on how to persuade your organization’s CFO to green light an expensive IT project? Okay. Let’s start with a quiz and only those who pass get to read the tips (scout’s honor here):
True or false?
▫ IT carries the day. (Dazzle the CFO with promises of IT glories and your funding is in the bag.)
▫ ROI sings. (Always throw ROI projections in the CFO’s face; those types get off on such numbers.)
▫ Never survey inhouse customers about their needs. (You don’t need support from constituents to get funded, in fact they just bog things down.)
▫ Always think big. (If the CFO asks if the project could be done in incremental steps, laugh in his face. It’s all or nothing, baby!)
▫ The business doesn’t matter. (Don’t sweat tying IT back into the business fundamentals.)
Just in case you missed it, every statement above is false. In fact, wildly wrong in an economy where harried CFOs are double-checking where each dime goes. Yet, what is shocking is just how many CIOs are still presenting funding requests that miss the mark on every possible level. “Getting projects approved isn’t rocket science, but you’d be surprised how often IT ignores all the fundamentals,” said Tony Fischer, CEO of DataFlux, a data integration company that is wholly owned by SAS.
How did you score on the quiz?
What underlies this admittedly facetious quiz are some very harsh realities and the first is that: “CFOs don’t believe IT’s estimates, they too often have seen IT fail to keep its promises,” said Dan Galorath, founder of Galorath Inc., an El Segundo CA-developer of software tools for estimating costs of IT projects. He adds, “Credibility is the big issue for CIOs.”
Another big problem: ROI projections for IT projects have rarely panned out, said Johanna Rothman, author of Manage It! Your Guide to Modern, Pragmatic Project Management. According to Rothman (and this idea is huge) CFOs just close their ears when CIOs prattle about ROI because so many times in the past those projections amounted to nothing. “It’s impossible to honestly forecast ROI on IT projects. Accept it,” said Rothman who acknowledges that CIOs root their entire argument on ROI projections that probably will do no good at all. “CFOs won’t believe you.”
Psst, Over Here
So, if these are dead ends, what are the secrets to fast tracking IT projects?
Experts share the scoop:
1. Go in with your IT expenditures benchmarked against your peers, advises David Ackerman, IT practice leader at consulting firm Hackett Group. Of course, do this only when your firm is under investing, but if there is a disparity between what your organization is spending on IT and what competitors are spending, CFOs will take notice and that alone may nudge them nearer approving IT upgrades.
2. Document benefits from past IT expenditures, continues Ackerman. Go into a meeting with the CFO with reports that show concrete gains from previous programs approved by him (or his predecessor). That track record shows you aren’t just blowing smoke, that in the past you have delivered results. Highlight where IT spending delivered business benefits. That’s really what CFOs want to see.
3. Be ready to start small, adds Dino Bozzo, president of Konverge, a Toronto-based software developer. “We are doing pilots, prototypes, sometimes even introducing a smaller feature set at a project’s start. That is how to win funding today.”