I am tired of hearing this complaint. Of course theres never enough money. Everyone wants more money which is why theres never enough. US companies are better at cutting costs than they are at growing their businesses, so theres less money in our companies to do anything meaningful. The government has already spent itself into oblivion screwing our kids in the process so theres no money there for essential things like healthcare and education. Many of us have huge mortgages so we dont have enough money for even modest vacations or college tuition for the same screwed kids.
Technology budgets are always under attack. Most of these budgets have little or no discretionary room to maneuver. So when the boss says what about that Web 2.0 stuff? What are we doing there?, most CIOs and CTOs tell them were looking at it, knowing full well that they only have enough money to put out the daily brush fires and nothing more.
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Exacerbating the shortage of cash, operational technology infrastructure, PCs, laptops, PDAs, cell phones, messaging, and the like is expected to cost less every year. After all, everythings a commodity, isnt it? And everyone knows how flat the world is.
Lets talk about guerilla budgeting.
First, if Im a CIO or CTO, Im not telling anyone how my investments distribute across my operational versus strategic priorities because I cant draw a clean line myself, and because I want to make sure that I dont create a budgeting target the CFO might lock on to. In fact, I need to protect whatever discretionary latitude I have because I need to be strategically not just operationally responsive to the companys requirements.
Since I cant draw a clean line between all of my strategic and operational projects, I will push all of the gray area projects into the strategic category. This will insulate them from the cold of commoditization and the expectation that this-should-be-cheaper.
I will also campaign for new strategic projects with the senior management teams of the enterprise and the lines of business. This is marketing, pure and simple. I need to convince them that I can help them solve some of their most pressing problems like, of course, cost management, but also customer service, cross-selling, up-selling and anything that leads to profitable growth.
If Im a really good salesperson I can convince them to pay for the new initiatives as add-ons to my budget. These should be sold as special projects with pilot phases that provide enough information to determine if a major initiative makes sense. These are classic win/wins since I get more money to invest in strategic projects and the business feels good about using technology to solve major business problems.
Im also going to squeeze my vendors so tightly that they cough up cash all over the floor if they want to keep my business or want new business from me. The strategic pilots that I do for the lines of business should be at least partially subsidized by vendors with vested interests in the outcomes.
A rule of thumb is 10% of the eventual project cost, where a $10M project would have a subsidy value of $1M. After they stop crying, they will accept the terms. Of course, the quid pro quo is that if the project escalates to full value, the subsidizing vendor will get the deal.