Build an effective alliance between the CIO and CFO to ensure transparency and control of the company's IT investments, advised a Gartner analyst.
Speaking at an IBM seminar Wednesday, Andy Rowsell-Jones, Gartner vice president and research director, said IT contributes to cost efficiencies through supporting process improvements and innovation, and CIOs should learn to "speak the CFO's language" in order to get approval for their projects.
The analyst said IT spend represents a small proportion of overall business operating expense. Quoting a December 2008 Gartner report, he said this proportion ranged from 1.7 percent in the construction and engineering industry to 12.6 percent in the banking and finance sector.
While IT expenditure may be a small proportion, budgets have been cut in light of the economic situation. Rowsell-Jones said IT spending has risen every year from 2003, but is being cut for this year, according to a recent Gartner survey.
Clive Lim, IBM Asean finance director, said: "CFOs see [a project's] budget in [its] totality. There are a lot of other costs that sometimes get left out of the IT project pitch."
These include both cost savings and expenditure. For instance, a server consolidation project could include the amount of rent saved due to the reduction in floor space expected, he said.
Another project might fail to include peripheral costs of user group expenditures, said Lim.
In the current recession, CFOs are also more likely to pass on projects requiring capital expenditure, he added. CIOs should rejig their projects to offload some of the burden onto operating budgets.
"There is the theme of using the right language to communicate with the CFO," noted Rowsell-Jones.