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It’s probably already time to prepare your company’s Budgets. For many CIOs, this is an important moment, the outcome of which will set the framework for your next financial year, but it remains a subject of apprehension, given how tedious it can be to draw up the Budgets. All the more so as the IT function, increasingly central to the company (and so much the better!), is being called upon from all sides.
To help you get to grips with this budget planning period, we’ve put together 5 practical tips for immediate implementation, and asked Samuel Revenu, CEO of Abraxio and himself a former CIO, for his views.
1. Make your existing system more reliable
Good news: unless you’re new to your company, you’re not starting from scratch. To project your new year’s Budgets with confidence, rely on a detailed, reliable and up-to-date knowledge of your current situation:
- What is your current budget situation in real time? How does your consumption compare with your forecast? What are your commitments between now and the end of the year?
- Where are the risks, the potential drifts that will impact this year’s landing and the start of the new financial year, and on the contrary, the pockets to be re-exploited that will enable you to identify levers for optimization?
Chances are that between 50% and 70% of your Budgets are made up of runs that you’ll have to rely on next year, and which you can safely carry over almost unchanged. If this part of your budget is “clean” and well filled in, you’ll save a lot of time, which will enable you to concentrate on costing build projects, which are often more visible and strategic for the company.
When it comes to preparing Budgets, we never start with a blank sheet of paper, but we sometimes have such a jumbled basis of multiple Excel spreadsheets with uncertain updates that we’d almost prefer to start from scratch to get back on a sound footing! recalls Samuel Revenu. This is really one of the reasons behind the development of Abraxio, the desire to equip CIOs with a pragmatic management and steering solution, which centralizes and historizes all budgetary data and provides a real-time view. CIO Budgets are increasingly substantial, but you can’t reinvent the wheel every year. If you’re clear about where you’re starting from, it’s much easier to plan and write the future.
2. Think CIO Budgets and use your own analysis keys
Budgets are the sinews of war, and every department in the company often conforms to the matrices developed by the CFO and management control. Without calling into question the validity of this approach, it can be confining, as it is rarely adapted to the operation of a CIO which, structurally, has its own specificities:
- Distinguishing between build projects and run activities
- Multitude of suppliers and purchasing lines with specific contractual terms and conditions
- Temporality of Projects quite distinct from that of annual Budgets
- Specific categories of expenditure (SI district, purpose, etc.)
- Frequent to-ing and fro-ing between classic cash out view and P&L-oriented income statement view.
- …
When you’re a young CIO or a newcomer to a company, it can be difficult to break out of the framework set by the finance department or inherited from the past. This is where you need to dare to move the lines and look at Budgets from a CIO’s point of view, to propose new ways of interpreting them,” advises Samuel Revenu. He continues: ” What are the main expense items for all subsidiaries combined? Which suppliers could be pooled? What is the cost of maintaining the legacy? Having the answers to these questions will help you to get a head start on optimizing Budgets for the coming year.
In other words, to prepare for your new exercise, cross-reference your data and make it work differently, vary your analysis keys. This may highlight the fact that your room for maneuver on new Projects is hampered by the weight of the run, by the mobilization of too many Resources to maintain the legacy, by the scattering of suppliers who could be pooled…
By breaking out of the strictly financial framework, by changing your outlook, you’ll be able to give your Budgets a new perspective, “play a new tune” and unlock new levers of action that will benefit the future.
3. Open up your CIO’s Budgets and get everyone involved
Whether in support, production or development, no company entity can move forward without IT. So be proactive, get ahead of the game and take stock of the demands of the company’s departments. New projects? Take the analysis and description of your needs one step further, to make the most accurate assessment.
Take advantage of this time to share your macro IT strategy and roadmap with your contacts. This will enable you to stay one step ahead, to start laying down the milestones that will be useful when the final discussions take place, and to remain in control of the game. Induced benefit: you’ll be helping to promote a more open image of the CIO, far from the clichés of opaqueness that still sometimes die hard.
And whenever possible, involve your Teams, and especially your managers, in this planning exercise. By doing so, you give them a sense of responsibility for the Budgets for which they will be Workloads, and you place their scope within a more global framework, that of the company’s strategy.
CIOs are rarely communicators by nature, and some suffer from the image they are sometimes given. By presenting the global Roadmap and sharing Dashboards, we really have a lot to gain, because we reveal the extent to which the IT function permeates the whole company and is multi-solicited. advises Samuel Revenu
4. Make future decisions easier by scoring your Projects
You’ve done the rounds of all the departments, and have a virtually exhaustive view of all the Projects to be initiated or extended…. And every associated Budgets. And therein lies the rub. Because while Projects add up , your capacity to deliver is not infinitely expandable, whether in terms of Resources or Workloads.
So you’re going to have to arbitrate. To do this as objectively as possible, we suggest you take part in the scoring exercise. The usefulness of a project, its benefits, its contribution to the achievement of the company’s strategic objectives are obviously an entry point, but it will have all the more weight if you also index its value with regard to its execution conditions, and the effort required to deploy it. ROI – Return on Investment, Impact, Confidence, Effort, Risk, Budgets, Complexity… When you cross these axes, you get a more accurate picture.
“Project scoring is still not widely used in CIOs. I’m convinced, however, that it enables decisions to be made faster and more readily accepted, because they are objective. It’s a real key to bringing out the Projects with the greatest potential, and de-prioritizing the others. It’s not possible to cover everything in the exercise,” says Samuel Revenu.
5. Work out and propose several scenarios
The world is not a binary one, and there may be more than one way forward for a given Budgets. Working out alternative scenarios will enable you to enrich future discussions with Finance and General Management, and help you position yourself as a truly proactive business partner , offering proposals and solutions.
In budgetary arbitration bodies, we can move the lines, but the CFO and GM are like St Thomas, and you can’t blame them: they only believe what they see, and don’t sign blank cheques, says Samuel Revenu. On the other hand, demonstrating to them with figures that another path is possible, that investing in a redesign or in a more ambitious scenario can free up room for maneuver for another subject, for example, or create more value, can become extremely convincing and rehabilitates the CIO in his key role as steer. At Abraxio, we have focused on this very possibility of easily working and comparing “test” scenarios to speed up arbitration and decision-making.
Would you like to discuss how you can use the Abraxio platform to prepare your budget?
