Lessons in IT Transformation: Technology Expert to Business Leader

Fiscal Management—IT Is an Investment, Not a Cost

It amazes me how many IT executives view the CFO as their enemy and moan and groan about having to budget and manage to a budget. Can you imagine another business executive complaining about the financial portion of the job? Managing the finances is a crucial part of any executive's responsibility. Every leader must live within a set of fiscal constraints (except for the federal government, and we all have seen where that has led!). Fiduciary responsibility is “table stakes” for any executive.

The key to handling the financial aspect of the job is viewing (and making sure your board views) IT as an investment, not a cost. This is not semantics or smoke and mirrors! A cost suggests something that is “sunk.” You pay a sum of money and you get something in return once. An investment is something that yields dividends. Those dividends might represent additional revenue, cost savings, improvements in customer satisfaction, process changes, and so on. The idea of IT as a cost of doing business is a killer for a CIO. You quickly must get your board and executive team to view IT as an investment that pays dividends and is a capability to be leveraged.

Many times I will hear of IT executives “playing games” with their budgets. This is akin to keeping two sets of books! As a leader, you should manage your budget like it's your own money—because as a leader in your organization, it is! As a key stakeholder in the health of your organization, ...