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Scaling IT Demands to Fit into Budgets

New technology must be budgeted for when necessary.

As a chief financial officer, it may be easy to look at all business decisions with money or the bottom line in mind. Spending hours weighing the value of each investment, strategic move or elimination can train the brain to consider financial consequences or effects rather than more qualitative aspects of a decision. Therefore, it is imperative for CFOs to work with other executives to discuss requests and growth strategies so both sides understand how a change can impact business.

For example, a marketing team may want to launch a pricey campaign without realizing the budget does not have room for such an undertaking. After discussing the strategy collaboratively, CFOs may realize long-term value to the initiative that may not be apparent when looking at short-term figures or projections. Likewise, marketing teams may realize their aspirations were off-base and be prompted to find a more cost-effective version of the strategy to move forward with.

The same can be argued for IT investments. Almost every business has an IT component, as computing solutions are necessary to function in the modern marketplace. It is important for companies to understand what technologies are required to keep the enterprise afloat and competitive while working toward growth strategies. CIOs must also understand, however, that not all IT investments must be taken care of immediately, particularly if cash is tight. Thus, CFOs must have an understanding of when technology must be upgraded and what options are available to develop a cost-effective strategy with IT departments.

Scaling Solutions
Inc. explained every company will likely outgrow its IT resources many times, requiring costly upgrades and improvements. More departments are benefiting from advanced IT solutions in today's marketplace, with customers purchasing and interacting with the brand both online and in-person. Cloud computing solutions and mobile devices are being adopted at a rapid rate to support a more productive, agile workforce. As a result, IT resources multiply, as do maintenance and upgrade demands.

Often used to compete with other companies, technology plays a huge role in determining the speed of operations and adaptability to changing market conditions. If technology is antiquated, processes are slowed and competitors can gain an edge. However, overspending on technology too soon, before a company's demands require such extensive solutions, can take too much out of a budget and leave other departments ill-equipped to move forward.

CIOs can offer insight into what technologies are applicable to the business' functionality, and the pros and cons of each potential investment. CEOs will offer guidance on how the company plans to use its IT budget as well as other funding for different departments to support a growth strategy. By understanding where the company is headed, how the money will be handled and what solutions can help achieve the end goals, CFOs will be able to tackle conflicting demands and ensure all investments have been scaled appropriately.

To find a balance and prevent unnecessary setbacks, CFOs should work collaboratively CEOs and CIOs to understand the demands of the company, future aspirations and the current state of the market. By identifying the priorities from each leader, CFOs can work to formulate a compromised budget that satisfies the need to innovate with a conservative eye on purchasing appropriate solutions rather than all the new flashy gadgets available. As the company grows over time and demands increase, more IT solutions can be adopted to accommodate more business and processes. Until that time arrives, however, it is important for CFOs to neither get caught up in technology hype or remain ignorant to the significant benefits available through various business solutions.

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