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This article was originally published in the Opinions section of ITforBusiness magazine (May 2023).
Do you remember your first days as a CIO? That moment when you take your bearings with as much excitement as apprehension, and discover the budget for your new department… A budget you didn’t write, but which you’ll have to make your own, until the time comes for the1st budget you’ll build and present yourself. When that time comes, no matter how experienced you are, no matter how many times you’ve done it before: you’re never completely at ease.
The good news is that the context in which we’re taking up our new posts is a good one for us. While many expectations are focused on us personally, there’s also a real willingness to listen to the new ideas we’re going to bring to the table. This state of grace is ideal for getting things moving, by revisiting the CIO’s ambitions and strategy, initiating IS transformation, and initiating changes, including budgetary ones. Without being an end in itself, whether in terms of transformation or continuity, Budgets remain the sinews of war. The newly-appointed CIO must therefore seize the opportunity to challenge or resize it. Without making a mistake, because as everyone knows, ” you don’t get two chances to make a good first impression “.
A first copy to work on in depth
To succeed in this first budgetary exercise, you need to start by taking the time necessary to fully understand the company’s context and its new ecosystem. Otherwise, you run the risk of nipping the most brilliant strategy in the bud by missing the point. This groundwork must not neglect either form or content. To avoid losing credibility through approximations, you first need to have a thorough grasp of the costs you are “inheriting” and the figures you are manipulating. This requires an exhaustive inventory of the existing situation, which will probably have to be tidied up by first checking that the working base is sound, i.e. by cross-checking and cross-referencing all available figures – with those of the DAF in particular. There may be grey areas, where you have to proceed blindly. In such cases, don’t hesitate to say so. And if we’re starting from a blank page, we must also assume that we’ll need to do a complete exercise to rebuild the Budgets correctly.
All this helps you to be “right in your boots”. But to go further, to hit the nail on the head and make the right points, you also need to master the company’s financial steering mechanisms, such as the parameters of its capital strategy and the expectations of the CFO: cash-out or P&L to be improved, they’re not the same thing!
Finally, we need to understand who makes the decisions, and what the validation circuits are. And even what level of detail is expected of the Budgets. Are we going to break everything down line by line, or are we just going to look at the discrepancies in the big picture?
Essential communication
Even if CIOs are rarely fond of communication exercises, they’re going to have to do a lot of hard work here. Fortunately, there are a few tricks up their sleeve that can help. They can, for example, shift the emphasis by presenting a Budgets dedicated not to the needs of the CIO, but to those of the Business Units. An effort to explain the distinction between build and run will also be appreciated. As far as recurring costs are concerned, you’ll obviously need to justify any discrepancies, but you’ll also score points by highlighting the efforts you’ve made to challenge each run line. In a way, the new CIO has the right to take inventory, so it’s a good idea to take advantage of this before tackling cost reduction or control.
As for the build, here again you need to be strategic and skilful in your presentation, in line with the company’s strategy and ambitions (innovation, growth, cost control, etc.), unrolling the portfolio’s costing by project for the benefit of the Business Units, shifting the responsibility for decision-making to the Executive Committee as a whole, and clarifying arbitrations on the basis of factual elements – analysis of value and expected ROI. And let’s not forget the projects sponsored by the CIO (innovation, IS enhancement, etc.). All of this requires great care in the presentation, with particular attention paid to comparing the figures in the new Budgets with those of the previous year. This can only reinforce the desired image of seriousness, control and ambition.
“Belt AND suspenders
A final word of advice? Don’t hesitate to “take the temperature”. Before the official presentation, it’s a good idea to test your material – both in terms of content and form – with the CFO or another member of the Executive Committee. As well as ensuring that the deliverables are up to scratch, this is a great way to make allies. If all goes according to plan, this1st Budgets exercise will establish your brand as the new CIO, anchoring it in the reality of your new company. And above all, it will pave the way for you to roll out your Roadmap… and be ready to start again, and again… because a Budget forecast is obviously designed to be constantly realigned with reality. But you already knew that!