Five Ways to Protect IT Budgets For the Long Term

Bloomfield Hills, MI (Gawkwire.com) IT professionals are looking at the unsteady economic seas and wondering which IT projects are going to sink and which will sail into next year. Logicalis, an international provider of high-performance technology solutions, today offered a best practices list of Five Ways to Protect IT Budgets for the Long Term. Logicalis CFO, Greg Baker, shares his financial perspective to give CIOs important insight into how to package initiatives to gain the approval and enthusiastic support of their CFOs.
 
Logicalis has also developed the "Logicalis IT Request Rating Calculator" to help IT professionals gauge the rating their IT requests might receive from their CFOs. Greg Baker also discusses strategies for IT professionals in a feature story, "Getting to Yes" and a companion podcast. The online tool, feature story and podcast are available for complimentary download.

"It's important for CIOs to have a little insight into how CFOs think when they communicate their IT department's needs and challenges. This perspective can help them protect the company from devaluing the importance of technology," says Baker. "As a Chief Financial Officer, I am more predisposed to listen to colleagues who are using the same metrics that I use when gauging ROI, for instance."

Baker's Five Ways to Protect IT Budgets for the Long Term:

1. Spend extra time to prioritize and support your spending needs.
"It's critical to present clear business cases when seeking funding for IT projects. Failure to clearly communicate with your CFO can torpedo any project. Speak in terms of net present value (NPV) and short payback periods a CFO will understand, along with assumptions they'll believe," says Baker. "Also, remember to highlight you've considered several options and the risks related to each. This shows the CFO careful thought went into choosing an appropriate direction," continues Baker.

2. Virtualize, virtualize and virtualize some more.
"Virtualization is a slam dunk for two reasons. First, companies make the most of what they already have by maximizing utilization across all existing machines and second, they reduce data center complexity, power consumption costs, the birth-rate of new servers and of course maintenance. Plus, payback can come in as little as 3-6 months," says Baker.

3. Validate your functional model and selectively outsource administration.
"CFOs understand the benefits of the pooled resource model and also appreciate predictable operating expenses. That's one reason that outsourcing areas like disaster recovery and network management is growing like never before," says Baker. "The outsourcing myth is it will be a complex 'all-in' decision. The reality is tailored support services can be up and running in a month. This reduces fixed costs and lets IT staff power shift over to strategic areas."

4. Pay for an honest assessment from a third-party.
"Be wary of free assessments that lead to biased advice or vendor shopping trips. Instead, back up budget requests with a trusted second opinion," says Baker. "If comprehensive cost-savings on a project like server consolidation is backed with convincing facts, approval odds grow exponentially from a CFO," continues Baker.

5. Revisit your positions on taxes and leasing
"Taxes and leasing options may seem like after-thoughts for IT, but they can convert a business case from good to great," says Baker. "Under the Economic Stimulus Act passed earlier this year, new hardware and software placed in service before December 31 can double or triple your tax deduction. Leasing arms of major IT manufacturers are sharpening their pencils like never before with highly attractive financing options, so ask questions. In these cash-cautious times, smart leasing can be the difference between IT driving a strategic initiative and standing still."

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