While all of us in the business know how important information technology is to our host company, convincing predominantly technophobic upper level corporate officers and board members of the same is a task requiring potent interpersonal skills rather than logic. If you wish to succeed in obtaining a workable budget for 2009, do not let any of them know you have read this article!
Having worked in the IT industry for 26 years for mid-range and large national companies as well as several multi-nationals, in a variety of fields and interacting with management at all levels from line managers to board members, I can assure you that budgets are purely about internal politics. Rational allocations of funds is a non-starter. To obtain the budget you desire you need to sell it on the basis of what they think they want, rather than what the company or corporation actually needs. In most cases, once you have the budget, you can use it as required to improve your company's success, regardless of how you have presented the expenditure in your budget proposal.
You will only be in trouble if your usage of budget funds results in a catastrophe; relatively minor problems are far more likely to be glossed over rather than punished, even in today's economic situation. So it is important to know both your own capabilities and limitations. Information technology specialists in general enjoy the cutting edge, wanting to use it to provide the best service possible to the departments that form the business end of their company. But control your appetite, ensure that the software and hardware you purchase will function as you expect and intend before you commit. Always trial not only internally to the IT department but with at least two or three offices in the department intended as the ultimate user of this technology. And get their feedback!
However, this is getting somewhat ahead of ourselves. The purpose of this article is to provide strategies to achieve effective, usable IT budgets rather than how to then use them.
Pretty presentations are very important, but they also need to be true. While most of the upper hierarchy of your corporation are likely to be technological innocents, it is virtually certain that at least one or two will have made the effort to know something about IT. Expecting to be able to pass off balderdash is foolhardy at best, don't try! But bright and flashy presentations that provide a true picture will generally be accepted by the knowledgeable and those who don't understand them will be far more likely to pretend they do than they would for more drab presentations.
The way you respond to any questions is crucial. Not only verbally, facial expression and body language is actually far more important. These people are masters of political infighting and intrigue; innocents in IT they may be, but they will instantly recognize any condescension and perceive it as disrespect. Any and every question asked, no matter how stupid, needs to be answered as though it is the most insightful and sensible question you have ever been asked.
You will have to decide whether you are the person in your department best able to do this, or whether one of your subordinates would be better as your department's front man in the budget approvals process. The person making the presentation needs either excellent acting ability or even better, to truly believe what they are presenting, no matter how fictional it may really be.
The presentation, besides being full of variable and bright graphic representations of all sorts of pertinent data, needs to be aligned to the perceptions and point of view of the decision makers. This is where many IT specialists make their biggest mistake. Their own infatuation with the technology blinds them to the low regard it is generally held in, particular by the upper levels of the company's hierarchy.
The information technology department in most corporations is regarded at best as a necessary expense, the price of doing business in the modern world. It is not considered as desirable, let alone valuable. Giving a presentation that itemizes the costs of maintaining current services and the expenditure required to upgrade those and/or provide additional services, while technically accurate, will result in a budget it will be a severe struggle to survive. It will simply reinforce the decision makers view that IT is an expense, rather than showing its value to the company's bottom line.
While still presenting the same information, you need to reverse the viewpoint. The primary focus of the presentation needs to be on the outcomes of the technology, not its cost. Make use of your positive connections with other departments, if they are few then you need to learn how to cultivate them. Providing technological assistance above and beyond that "required" of you can make you friends throughout the company, especially with those who actually do the work. Don't be shy of doing personal favors, helping people who have problems with their home computers. A very large component of corporate culture is the "you scratch my back, I'll scratch yours" ethic.
From these friends in other departments you can gain a realistic and valid perception of the value of the IT services you are supplying them. Likely to be a far clearer picture than any you might get from the upper management of their department. Before and after snapshots of their costs relating to software upgrades gives you figures you can include in your presentation. Allowing you to say something like, the warehousing division spent x amount on storing and shipping y amount of z product in comparison to the X+ amount it cost prior to the such and such upgrade. The cost of the upgrade was a, resulting in a saving to the company of B(ig) amount of dollars.
While your presentation should definitely provide both the savings resulting from the IT departments services and the costs, there is no reason that these need to be presented in the same size font. Show the savings in a larger, brighter font and the costs in a smaller, duller one. It may seem blatant, and in reality it is, but it will still be effective. Despite intellectual evaluation, the subconscious will still register the savings as more significant than the costs, purely because of how they are displayed.
If you can demonstrate an improved sales performance due to IT support, it is even better than savings. Savings improve the bottom line, but they still represent money the company already has; sales are additional funds coming into the companies coffers. Even when significantly lower than savings, they are still perceived as better.
Wrapping up the presentation with a summary showing the increased profits resulting from the sales and savings obtained throughout the company's divisions due to your effective management of IT resources will be far more impressive than a summary totaling the costs of running the IT department.
One last point, once you have estimated your budget funding requirements, add on an extra 50 percent. Information technology, as you know, is a rapidly advancing field; you will almost certainly require a larger budget than you expect in 2009. By selling your budget on the basis of increased profits rather than increased costs, you should find the larger budget going through far more easily than the smaller one you were going to try for. Actually, it is a fact of corporate life that larger budgets often prove easier to sell than smaller ones anyway.