In his regular blog in Computerworld, Thomas Juhl, PA IT strategy expert, encourages CIOs to make their IT budgets transparent so the business understands the underlying elements. Thomas questions why the business often assumes that making cost-reductions in the IT budget is a simple task. It’s not, he stresses:
“I wonder why people, in the finance department for example, fail to understand why making random cost reductions is not an option […] I think most people in the business fail to understand how an IT budget is actually put together.”
Thomas acknowledges that the IT department cannot control how the business perceives the IT department and their budget. However, says Thomas, the CIO is responsible for making it easier for the business to understand the IT budget. Thomas stresses that the key to a better understanding is transparency. The CIO needs to show the various costs in terms of labour costs, investments, supplier agreements and projects.
“As in all other parts of the business, cost reduction is important […] In order to create the best foundation to minimise costs over time, the CIO must ensure transparency so the business understands what the money is used for and why. Increased IT costs are often used to make the business more competitive and to lower costs overall”.
Thomas Juhl is an IT strategy expert at PA Consulting Group
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