Pray no one increases your IT budget

CIOs and their teams have been told for years to do more with less, and for the most part they’ve been successful. Now there’s one area of cost that may be harder to avoid

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Whether it’s been research I’ve studied or research I’ve helped conduct myself, CIOs often get asked the same question: Did your department get more money, less money, or the same? Here’s the question no one ever seems to ask: “Would you actually want more money?”

There’s probably an assumption that the answer will always be “yes,” but perhaps we shouldn’t be so sure. I recently hosted a roundtable discussion with a group of senior IT executives who all said the same thing that’s been reflected in the technology spending studies: they’ve either had their budgets cut, of they plateaued a few years ago. When there are any increases they are moderate, and very focused. No one seemed to be grumbling about it, though. In fact, when I asked people around the room how they measured their success, it was largely in how they have reduced costs still further. Virtualization may have meant less spending on data centre costs, for example, while certain operations became cheaper by transition to a software-as-a-service (SaaS) or cloud offering.

Related: IT cost optimization: The skill that dare not speak its name

Related: The 40% IT cost reduction: Here’s how we did it

There is a school of thought that constraints drive creativity, and I have found that to be true of many IT departments. They are problem solvers first and foremost, and working within limits is an area in which many have learned to excel. Some CIOs are also surely aware that an increased IT budget wouldn’t necessarily reduce complexity but introduce a lot more of it. In some cases, a company that puts more money into IT is a company in trouble, where information is so poorly managed and service levels have sunk to a point that an expensive break-fix is required. No one in the IT department wants to be seen as this kind of a cost centre anymore.

Analytics is the exception. As major industries like financial services and retail look at how to learn more about their best customers and improve service, they’ll need the technology to support them. In September, for example, London-based ABI Research forecast that the drive to “develop shopper marketing strategies, stave off online retail/showrooming, and maximize brick and mortar revenue (will) see the analytics market growing to over $3 Billion by 2018.” The same is probably true in banking and insurance, where optimizing for omni-channel customers means first knowing who they are and what they really want.

In Canada, though, I don’t expect to see too many IT executives asking for huge investments to bankroll an analytics project. Instead, there will more likely be a series of point solutions that can help them get their feet wet before they plunge into more expensive solutions and suites. And even here, it won’t be about asking for a dramatic, ongoing increase in IT budget. More likely analytics will be less an over-arching implementation than something tied to specific product and service introductions, or other initiatives where it is factored in as part of a discrete project.

I’m not suggesting IT budgets should remain frozen forever, or that it’s not possible for enterprises to cut their spending on technology too close to the bone. Sometimes you can only do less with less. What the best IT professionals seem to want, however, is not a specific dollar figure but a listening ear and support when they need it. This is the other thing that hasn’t changed: the only thing far more valuable than an increased IT budget is executive buy-in.

Visit the resource centre: Exploring Omni-Channel Effectiveness in Retail and Financial Services, featuring research from Gartner Inc. and more. 

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

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