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No 1: Budget Around Business Needs
This first principle applies in good times as well as bad. Without a set of technology initiatives that focus on what the business requires, all the right tactics in the world won't help when bad times come.
Michael Saitow, the CIO of liquor distributor MS Walker in Somerville, Mass., says one sign of a bad IT budget is the presence of things that are exciting but not necessary. "I look at budgeting very much as here's what I want from Santa Claus," Saitow says. "There are all the things that would be nice to have—like a BB gun. But if what I really need is a pair of jeans to wear to school," it would be much smarter to have that.
One way to force line-of-business managers to restrain their appetite for cool but questionable projects is to remind them that the funding is coming out of their pockets. While not all IT departments track usage in a way that makes it possible for them to bill on a per-transaction basis, it can be effective just to let managers know that their overhead goes up as IT costs rise. "Convene your decision makers and say, 'Here's the list of projects you asked for in 2008. Who's going to write the first check?'" advises Ken McGee, a vice president at research firm Gartner Inc.
Indeed, the best CIOs consult not just with their CFOs or CEOs, but with the business units that rely on the technology they're developing. Every September, for instance, Angelo Mazzocco meets with a wide variety of managers at Progressive Medical, the $200 million insurer where he is CIO. "The whole company is our user base," he says.
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