The digital world is at our fingertips, and we have to digitize our products and operations to catch up with the fast pace of constant technological changes. As we rely on technology to go about our daily lives, CIOs are shifting their focus from projects to products, while getting up to speed with DevOps, IoT, and agile to maximize business capabilities and outcomes. Digitization means change and innovation, but it also requires a new approach to funding IT. Andrew Horne, in writing for InformationWeek, suggests five actions to take to change IT funding in support of digitization:
- Develop a true enterprise-wide view of technology spending.
- Align funding to product lines and empower product teams.
- Carve out funding for digital foundations.
- Provide transparency into technology budgets.
- Shift spending for new business capabilities to business leader budgets.
New Funding Approach to Steward Enterprise-Wide Technology
Business leaders think that they understand technology and can determine technology spending on their own most of the times, but their limited visibility is the cause of redundant or insufficient investments. As such, CIOs should promote better coordination and prioritization to track enterprise-wide technology spending. The most successful CIOs know that spending decisions should be made to achieve business outcomes, which requires a shift in the mindset to think like businesspeople and embrace business case reviews and other important project funding features.
While investments should be made continuously to improve technology, they should be implemented transparently, as well. Having to explaining the need for funding is never easy as people are always picky when it comes to spending money, so what CIOs can do is educate business leaders on the drivers of IT costs and what they mean in improving business capabilities. While investing in technology is worthwhile, other things matter equally. Technology investments should be treated fairly and balanced with other investments to create a competitive advantage. At the end, an IT team is not an accountant or a budget owner, but rather consultants on technology spending for business leaders.
Horne writes about the importance of getting funds for digital foundations:
CIOs are focused on building digital foundations such as cloud-based infrastructure and API platforms. Because the benefits of these foundations are shared across the enterprise and delivered incrementally, IT teams are in the best position to identify and fund them. IT should align foundational investments to business goals and identify use cases where business areas can realize tangible value. Some companies also find it helpful to distinguish spending on digital foundations from spending to run and maintain legacy systems. If these are lumped together, they risk being cut indiscriminately, whereas keeping them separate allows CIOs to explain that spending on digital foundations is necessary, healthy and should be protected.
You can view the original article here: http://www.informationweek.com/strategic-cio/cios-should-make-5-changes-to-it-funding-in-an-age-of-digitization/a/d-id/1328425