Can you share your approach to discussing IT spending with your CFO? Any tried and true methods you've developed over the years to effectively communicate business value of technology spending in a way that resonates?
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Managing Partner in Miscellaneousa year ago
We have a specific process for approving IT procurement, which is almost always SaaS. This covers every aspect: cost, security, integration with existing systems, potential duplication of existing tooling, etc. We also ask that two SaaS services be eliminated or consolidated for every one new service being added. This isn’t always possible but it is important to constantly prune the list.CEO in Services (non-Government)a year ago
I have always related IT spending in terms of value. The goal of a corporation is to create value for its customers and stakeholders. Differentiable value (e.g., competitive advantage) is attained when the company is more valued by one's customers and more valuable to its ecosystems of trading partners. Relating IT spend as enabling value capture, value optimization, new value creation and value delivery have in my experience always been easily approved. e.g. If we spend X on modernizing our customer experience systems (front end and back end) with AI or other technology we can deliver more value to our customers, faster and at lower cost. Lower cost the CFO asks? Yes. Because keeping a customer is far less expensive than replacing them.
VP, Data and Opexa year ago
Typically majority of ideas submitted to CFO have good financial metrics. The key differentiator is proof of value to customer, hence those investment asks which come with pilot customer validations from POC or gauge of interest from customer advisory boards have higher chance of approvalsBoard Member in Healthcare and Biotecha year ago
All great inputs from respondents. A few additions from me:Financial metric ROI (which most CFOs like) can be determined in many ways. I always attempt to pitch projects with 12 or lower months to recover the investment. Then add Inpact to Customers, Employees, other stakeholders - partner ecosystem or shareholders, regulatory requirement, new business capability and finally top line or bottom line. This everyone understands.
CFO and CIO are expected to be on the same side of the table when it comes to discussing IT budgets. They cannot be at loggerheads, and most CFOs today are building the bridge considering that IT has become an integral part of the business operation.
Focus on the potential ROI and long-term benefits that technology can provide, such as improved customer experience, expanded market reach, and increased efficiency to respond to market demands. Understand the risks of not investing in technology, including missed opportunities and mitigating business risks (not only privacy & cybersecurity risks).
Use concrete examples and data to illustrate how technology has helped achieve your business goals in the past, leverage industry stories if necessary. Finally, ensure IT spending aligns with the business strategy to prioritize investments that have the greatest potential to drive growth and innovation.