Special Feature
Part of a ZDNet Special Feature: IT Budgeting 2015: Planning the Next Stage

10 ways to secure funding for your next IT project

Trying to convince the board to fund an IT project? Here are 10 techniques IT leaders can use to get them onside.

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IT has historically been perceived as a cost centre, and therefore a good place for businesses to cut. But it doesn't have to be that way.

After years of battening down the hatches, firms are willing to spend on IT again, with a recent survey by IDC finding that companies are allocating nearly half of their IT budgets to new projects. But securing funding for these projects can be an uphill struggle, so how can CIOs land the cash needed to make them happen?

Here are some techniques that can work when you're arguing the case for an IT project.

Make your pitch about three things

When pitching a project, the most important thing is to concentrate on how it will impact the business. "Don't even think about the technology when you're putting in for the budget," said Clive Longbottom, founder of Quocirca.

"Any change can only impact three variables within the business: How are you going to lower the risk to the business, reduce the cost to the business and improve value for the business?" said Longbottom.

"Provided that any argument you put forward fits into one of those three, you stand a much better chance because the business goes 'this is now an investment, rather than just a technology spend'," he added.

Team up with business leaders

A good way for a CIO to ensure a project fits into one of the three business-boosting criteria outlined above is to team up with frontline managers.

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Line-of-business chiefs can help CIOs figure out where IT can make a difference inside the organisation, and articulate it in a way that gets the chief executive's attention.

"One of the things CIOs need to do is not go it alone, but show that they've had the conversations with the line of business," said Marianne Kolding, who runs services research in Europe for the analyst house IDC.

"The line-of-business to CIO connection is absolutely key, both for driving those projects forward, but also for getting the board to see this is a joint project for the business and the CIO, and that it stands a good chance of being successful. That whole integration between business and IT is hugely important when they try and pitch for more budget."

Which line-of-business managers are the right ones to partner with? It obviously varies, but a good guide is to ask what are the core competencies of your business, said Kolding.

"It's a question of the type of company it is: in a transportation company maybe the logistics guy is a good guy to talk to; or in automotive it might be the design department."

Make the project easy to digest

The lower risk a project is, the more likely you are to win backing for it. That doesn't mean limiting your ambitions, but rather presenting larger projects in a way that seems manageable.

"The key is to look far more towards an agile development, where it's a case of eating the elephant and you cut everything up into small bits," said Longbottom.

Another approach is to present a pilot that can be scaled up to a full-blown effort.

"Budgets can be released more easily if they [IT leaders] can show it's not going to be a multi-year, tying-up-all-our-resources project, as well as how it can be piloted along with proof points [for success]," said Kolding.

One way to minimise initial spend on these pilots is to use on-demand cloud services, such as Amazon's EC2 IaaS offering, she said.

Use real-life examples

If other firms have already embarked on a similar project, or conversely failed to act and are paying the price, then their experience can help persuade the board to invest.

"Find examples, and say 'This is where we have seen this already happening'. Some boards are quite risk-averse and they would prefer to not necessarily be the first people out there," said Kolding. "You can say: 'These guys are already doing it and if we don't move fast we're going to be left behind'," added Kolding, who noted that CIOs can ask vendors for help in providing examples of successful implementations by companies.

Analytics are in

Beyond the 'big data' buzzword, there is an appetite among execs for exploring how to use analytics to drive better decisions by the business, according to Kolding.

"Analysing data can create faster turnaround times and decision-making processes — all the sort of stuff that makes the business more agile," she said. "Most board members would always like better information to drive their organisation forward."

Quocirca's Longbottom said that more important than rushing to implement a big data analytics project is ensuring that such projects can actually be carried out.

"If you are funds-constrained, then big data is probably a project for 2016, rather than 2015. It's better to concentrate on questions like 'What's the quality of our existing data?', 'Is everything integrated in the way it should be?'," he advised.

"It's laying the foundations for big data later on, but I wouldn't rush into it just because it's the latest topic du jour."

Don't fall into the cheap-as-chips trap

Focusing too heavily on a project being cheaper than an alternate option will only complicate the business of selling a project.

"I would focus on outcomes. As soon as you start saying 'This project is cheap', someone else will say 'You can get it cheaper over there' and you start to have a price conversation, rather than a value conversation and I think it's more important to have a value conversation," said Kolding.

Make it a self-funding project

While stressing price isn't constructive, you can highlight the contribution the IT department has already made to offsetting the cost of a project.

"Look at everything the project could be, take three of the top problems and say to the business 'These are the ones that we will concentrate on'. These are the ones that will deliver the most bang for buck'," said Quocirca's Longbottom.

"Once you've proven how much they save, say 'The business can keep so much and we'll also keep so much to put into the next 10 things'. Make it a self-funding project," he added.

Highlight how much past projects have saved, said Kolding: "If you can see some investment you made last year allowed you to cut operational costs by x amount, you can say 'We can part-fund this already from what we've released in terms of our operational costs, but we need that little bit extra'."

Explain why shadow IT makes IT more, not less relevant

With the wealth of apps and cloud services and apps available to frontline staff, some departments may be tempted to source their own technology and bypass in-house IT altogether. However, CIOs can make a compelling argument as to why they are still a vital part of any project, said Kolding.

"It's so easy for people to go out and test things out and buy a service for three months to a year. Before you know it the company is using a lot of different services but none of it integrates very well and there's overlap."

CIOs need to stress the importance of IT having oversight over what services and apps are being used in order to minimise the risk of data being spread over incompatible silos, and to avoid the business paying over the odds for multiple consumer services.

Drop in some buzz words

As ill-defined as you might find buzzwords such as 'cloud' and 'big data', they have their uses when selling a project.

Vapid as they may be, these phrases are likely to be on the minds of executives as something they should be focusing on, so casting your project in that light could strike a chord with the board.

"Most business people that are worth their pay are on the ball about technologies that can drive change in their business," said Kolding.

"It's not that long since 'cloud' was on the front of The Economist and the same goes for 'big data'. I'm sure that many board members get asked by some of their colleagues about 'Are you guys driving big data projects?'."

Get the right members of the C-suite on side

It's a great time to forge a closer relationship with the chief marketing officer, according to Kolding.

"There's a huge focus on the CMO at the moment," she said.

That focus stems from CEO interest in what IDC refers to as the 'third platform' technologies that fit nicely within the CMO's wheelhouse — social, mobile, analytics — "that's going to be used to understand customers better, improve interactions with them and provide better services and products to the customer," said Kolding.

The chief financial officer is another obvious choice for the CIO to cosy up to, said Kolding, although many IT directors already report into the CFO.

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