IT’S strategy season for many companies, and IT managers and chief information officers (CIOs) face balancing the need to move forward with digital transformation/innovation initiatives against the cost of resources.

With the onset of the pandemic, many companies saw massive budget cuts. On the heels of this, they would have also seen the need to have enhanced technology infrastructure and people resources in place to meet the growing demands stemming from its impact. Quite a few of these entities put the importance of having a sound IT budget on the back burner and find themselves playing catch-up at an even more expensive rate than they had anticipated. So how do we plan budgets in this new season?

The first challenge to overcome is accepting that most technology projects are multi-year initiatives impacting multiple portfolios within the business, and that these projects require that funding comes from different business units vs just being tied to IT. This requires treating the budget in a more flexible manner that doesn’t always suit the traditional budgeting method.

The second challenge is that IT teams tasked with budgeting don’t understand the process, and the finance department does not understand IT. We suggest that the finance team have a keen understanding of the goals of the organisation, short and long term. This way, they can work with the IT team in aligning these needs with the relevant resources. While this may sound pretty basic, many companies throw this approach out the window when the board and budget constraints pressure force IT to fit within the established spending guidelines.

The third challenge to overcome is figuring out what is a priority when everything is a priority. This challenge has been amplified with the pandemic and is causing much suffering in the strategy room. Defining which category the IT spend falls into — whether foundational, strategic or aspirational — helps leaders allocate budget amounts. One such approach is to determine if the spend is supporting the run (mission-critical/foundation), grow (strategic, important with some flexibility) or transform (blend of strategic and nice to have) aspect the business.

These are some of the key considerations that technology leaders need to have in mind when going into a budget battle. Despite the challenges of these times, the primary concern has to be alignment with the overall strategy for the organisation and how IT acts as an enabler for their goals. To get additional insight and support, the Jamaica Technology and Digital Alliance (JTDA) is conducting a masterclass on strategic planning for digital transformation on September 13th. For more details visit www.biztechconf.com/pulsetraining