IT Budgeting: Think Like a CFO

Leave it to an IS professor to state it definitively: The trend of focusing IT spending on capital projects and not integrating that spending into set budgets is over. That makes it even more important for CIOs to know how to think like a CFO. So says Robert Zmud, professor and Michael F. Price Chair in MIS at the University of Oklahoma in Norman, who spoke at an IT budgeting conference at Bentley College in Waltham, Mass., last fall.

Zmud says CIOs need to convince fellow executives to spend on IT initiatives by providing concrete examples of how, for example, new technology infrastructure will create a solid foundation for the future.

Add to the CIO’s mix a dose of marketing, Zmud says. CIOs need to do a better job selling the importance of technology. Look around at what peer companies are doing so that you can better position any proposal made to management. If a small insurance company is spending $10 million a year, while its competitor spends $20 million and it is more profitable, the CIO should bring that news to the executive board. “When it looks like other people are spending more or less money than you are, that’s good to know,” Zmud says.