Selling IT to upper management

With the pressure on to cut costs and do more with less, there are a number of steps IT managers can take to win over the keepers of the purse strings.

"Large organisations like the Australian Broadcasting Corporation face intense pressure to cut IT costs," said Wayne Barlow, the national broadcaster's manager of application services.

The ABC, with some 4000 Australian staff, has slashed its IT budget by 5 to 10 per cent every year over the last five years, allocating $12 million to IT out of an $800 million annual budget.

However, Barlow believes that IT managers are in a perfect position to influence the board, because they are the ones who understand the "interconnections" between disparate business units.

"These managers are often the best people to propose new projects for their company, because they are the ones who provide multipurpose, multi-user systems horizontally and vertically across the organisation."

He recommends developing close working relationships with department heads in order to gain knowledge of business units' specific needs, strategic initiatives and budget constraints.

"If there is a business problem related to, say, a finance system, it's wise to have a close relationship with the CFO. Get the CFO as a sponsor and chief seller at the board level," Barlow said.

The broadcaster's proposed $2 million network initiative for ATM (Asynchronous Transfer Mode) has been in negotiation for three years. The project is very technical and extremely hard to sell, according to Barlow, but has been pushed on the long-term benefit of delivering large bandwidth throughout the ABC's internal network for distributing digital content to all business units. "It's definitely being discussed and closer to approval now," he said.

Paul Duffy, technology manager at Michael Page Recruitment, says the IT manager is more important in companies today because their buying decisions are tied directly to the commercial goals and outcomes of an organisation.

While IT executives here are getting "slightly better" at managing specific projects, they still do not address the issue of why they're doing a project, or even if they should retire certain projects, claims Meta Group Asia Pacific managing director Paul Ventura.

For Ian Birks, managing director of research firm Ideas International, the key to selling IT to upper management is to form cohesive plans around the pillars of existing business strategy. IT managers must clearly demonstrate how selected and prudent investment in IT can bring benefits to their organisation quickly and effectively, Birks said.

Ventura says it's common now for chief information officers in Australia to be expected to produce returns on projects within six months. "The concept of IT value now is a difficult one. There is a general cynicism about how much money has gone into technology projects and how much has come out," he said.

Unisys Australia general manager of financial systems Greg Howell agreed with Ventura. "Companies are looking for fast implementation and instant payback," he said. "Depending on the IT investment itself -- which can be many millions for back-office financials or a front-office Web banking project for a finance company -- the day of the project with 12 months to pay-back is gone."

While many remain sceptical about promises of such rapid returns, Howell insists that the best way to sell the value of IT to upper management is to "get inside the head of the line manager".

"When business managers say 'I want to know more about my clients and who the most high-value ones are', IT managers must be able to meet this need. Their mandate is to reduce operating and human capital costs, and create competitive difference through careful IT expenditure or by maximising current infrastructure," Howell said.

According to Birks, IT managers must exploit every opportunity to cut spending on static or diminishing value initiatives and focus on areas that create competitive advantage. For medium to large-size enterprises Birks sees the current choice of smart investments including improved customer-facing and supply chain technologies, CRM and customer analytics deployment, wireless information delivery and "bullet proof" security investments. Birks also believes that over the next few years businesses will spend less on PCs, infrastructure and desktop technologies and focus more on large CRM projects, building secure IT installations, and outsourcing their underlying IT functions.

Yet the overriding issue now causing senior executives to question the validity of further technology investment is that businesses are suffering from "IT over-capacity", said Aseem Prakash, chief executive of Interactive Knowledge Online and moderator of online discussion forum e-business hubs Asia. "Customers have been loaded with over-capacity since the dotcom mania of 1999 and 2000."

Prakash adds that many organisations have a culture of "asset write-off threshold", believing that if an asset has not reached a certain threshold value, it cannot be taken off the books.

"Overall, the most practical step that managers can take to push the case for IT to upper management is to ask themselves if they can align IT with the CEO's main business agendas," Prakash said.

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