One of the most challenging aspects of a CIO’s position is to ensure that there are indeed adequate financial resources to accomplish what needs to be done to facilitate digital transformation. In light of shrinking budgets and increased expectations, this can be a very big challenge for any CIO. From my viewpoint, “managing the money” is one of the key skills and competencies for any successful CIO and is the fourth CIO leadership fundamental.
In today’s hyper-competitive business environment, organizations are constantly looking for opportunities to cut costs and increase productivity. While some organizations may have the opportunity to spend more to support a new strategy, many more are in the position of having to continually reduce their budget and deliver new business capabilities. For these CIOs, holding the budget flat is simply not good enough.
This situation often can translate into direction from the CEO or CFO for the CIO to dramatically reduce the investment in information technologies and/or conversely to accomplish much more without increasing the current level of expenditures. At the same time, some unit costs do continue to escalate each and every year for people and other necessary aspects of the budget, such as software maintenance and security. As a result, CIOs have adopted a number of strategies with the corresponding tactics to attempt to address this ongoing reality, including:
- Managing the demand side – effectively prioritizing all of the requests to focus finite resources on those initiatives with the highest strategic business value;
- Managing the supply side – continuously seeking to extract more value from the supplier community to competitively leverage economies of scale and cycle times;
- Leveraging newer technologies – taking advantage of the open marketplace and advances in digital technologies to replace proprietary and costly legacy infrastructure and systems;
- Pushing internal productivity – seeking to improve skill levels and the inherent culture of the organization to generate more output with less effort from internal resources; and
- Streamlining operations – optimizing organizational structures, the span of control and the related processes to be as efficient as possible.
Regardless of the approach, from past experience, this can be a never ending challenge for as soon as you have successfully achieved the level of required improvements for the current budgeting cycle, it will be time to start planning for the next one.
This is where one of the key attributes of successful CIOs, resilience, is the most important. This is the ability to keep pushing forward on the required strategic business transformation agenda and all that it implies for the benefit of the organization without ever giving up due to the challenges of “managing the money”.
Over the course of time, the most resilient CIOs are often the most successful ones.