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How New Expenditures Affect the Bottom Line

By Ken Denman

January 15, 2002 — CIO —

ATTENTION, CIOS. Pay attention to how your peers brief the CEO and CFO. Their plans address how they will either save or make money for the company. With the possible exception of the now-eulogized new economy, corporations have always looked at how new expenditures affect the bottom line. And if for some strange reason executives should forget this basic tenet, their shareholders will remind them.

Corporate budgets have witnessed cutbacks?and IT departments are suffering. Some CIOs find it more difficult to support their budget from an ROI perspective. In reality, corporations expect to have an IS infrastructure that enables their workforces to be more efficient and enhance the bottom line.

However, CFOs will be skeptical of any new IT ventures. In 1998, $75 billion was spent in the United States on IT projects that failed. No wonder CFOs question CIOs when they talk about the need to have the latest hardware or software.

So what’s a CIO to do? Start by putting all the buzz phrases, such as thinking out of the box and shifting paradigms, to use.

For example, many companies expect their mobile workforces be productive on the road. Yet CIOs are wrestling with skyrocketing international call rates.

Several companies try to link employees to the corporate network with options such as remote modem banks and calling cards, but those can be cost-prohibitive resource gluttons. Nor do they provide the coverage needed for mobile professionals.

Some companies are signing with providers that aggregate multiple dial-up, ISDN and broadband Internet points of presence from carriers and ISPs to form a global network instead of attempting to build one of their own. This results in a cost-effective remote access service as mobile professionals can place local calls from virtually anywhere in the world. This business model has been proven in other markets. Visa follows it by aggregating multiple banks and financial services to establish a global consumer credit business.

Before paying for a remote access service, CIOs should demand that the vendor provide quantitative costs savings and ROI metrics for its service. The vendor should offer software that is interoperable with VPN, firewall and authentication solutions. The network must also support multiple technologies for various devices, such as laptops, desktops and PDAs.

Focusing on the bottom line means looking at how technology either makes or saves companies money while enhancing productivity and efficiency. Although this approach is a back-to-basics philosophy, finding the right solutions will require some nonconformist thinking.

 

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