A successful IT department requires knowledge, foresight, planning — and also a significant amount of money to fund everything from cloud services to strong security. Yet convincing management that IT needs a larger budget to address critical needs has never been easy. Complicating the task is the arrival of critical — and expensive — new technologies, such as AI, network automation, and growing data management demands.
Making the Case
Any conversation about budget increases should begin with a clear understanding of where funds are currently being spent, says William “Bill” Lobig, vice president, IBM automation product management. “This may seem obvious, but when looking at IT spend, it’s not as simple as you may think,” he states in an email interview. “IT leaders must enter the budget conversation positioning IT not as a cost-center, but as a true value driver across the business.”
The best way to ask for more money is to show how it will lead to tangible benefits, usually through increased revenue or reduced costs, says Sourya Biswas, technical director, risk management and governance, at cybersecurity consulting firm NCC Group, in an email interview. “However, the IT leader should be careful not to overestimate the benefits while underplaying the drawbacks.”
Patrik Hachmann, senior director of business value engineering at enterprise software developer Software AG, agrees that the case for a larger budget should be presented as a value proposition. “As the monetary benefit of a platform can usually not be fully demonstrated across all use cases and from all angles, it’s important to show that investment is already justified for the most important two or three initiatives alone,” he explains in an online interview.
Once an IT leader shows that a larger budget will contribute to the business’s overall return-on-investment, it’s possible to build a stronger case for spending to improve performance or to make investments in new technologies, Lobig says. “What’s important to note about these investments is that they’re smart and informed, with a clear line of sight to business ROI.”
Getting to the Point
Organization leadership wants to know how a larger budget will translate to measurable business value, Biswas says. “Alignment between business and IT objectives is key to getting buy-in,” he notes. Yet it’s not all about the big picture. “At a granular level, stories on how users — customers or employees — would benefit from initiatives under a larger budget will also resonate with decision-makers,” Biswas explains.
It’s also important to openly acknowledge any assumptions and possible drawbacks, Biswas says. “By enumerating them in the presentation itself, the IT leader can preempt objections and possibly be ready with responses to counter them.” The IT leader should also try to meet key decision makers beforehand to align the funding proposal with their expectations, and hopefully their advocacy, during the presentation.
Coping with Rejection
Outright rejection of a budget expansion request is unlikely, but not impossible. “The important thing is not to take rejection personally — it’s the case that’s rejected, not the person who presented it,” Biswas says. It’s also important to understand that the rejection is not necessarily wrong. “Sometimes, we get too close to our ideas to evaluate them impartially,” he explains. Understand, too, that a rejection isn’t necessarily forever, since issues that prevented approval can be addressed and resolved to present a more convincing case.
It’s important to fully understand stakeholders’ individual interests as well as their tactical and strategic goals, Hachmann advises. “This approach requires a strong understanding of the respective priorities of each person involved in the budget approval processes.” he says. “With this [tactic], you’ll be better equipped to align IT initiatives and their costs with the stakeholders’ business strategy.”
IT leaders often make the mistake of generalizing on how a bigger budget will improve IT instead of communicating the ways it will help the business. “IT leaders should be careful they’re not perceived as ’empire builders’ instead of business leaders who want what’s best for the larger organization,” Biswas says. For example, if it makes sense to outsource a particular capability, the IT leader should state that fact instead of asking for funds to build that function in-house.
Seek Openness
There are many valid reasons to increase spending on technology assets, especially when examining ways to innovate and improve productivity, Lobig observes. “Developing an open culture of communication within a FinOps framework and equipping your engineers, developers, and IT teams with the tools they need to make responsible, informed decisions, will allow you to make the case for a bigger budget.”