By Lalo Perez
Chief Financial Officer
City of Palo Alto
With technology evolving rapidly, it’s becoming more difficult to make funding decisions and to ensure that stakeholders back IT projects. During a session at the year’s 2nd Annual ConNEXTions 2014: A Frost & Sullivan Executive MindXchange, Lalo Perez, Chief Financial Officer for the City of Palo Alto, talked about the challenges from a CFO’s perspective and offered advice for determining the right way to fund technology.
IT governance is critical today, Perez said, because there are many organizational needs but limited resources. The times have changed – Palo Alto has a smaller budget than it used to, with less money available to spend on technology and infrastructure. The IT team also has 10% fewer employees than in past years. Organizations everywhere need to be more careful with how they spend money and use staff time.
Include All Stakeholders
One important step for improved decision will be getting more involvement from throughout the organization, Perez explained. Key stakeholders need to be a part of the technology decision making process, and this group needs to have a shared, stated vision – it shouldn’t just be the CFO making the calls.
A team of stakeholders should be assigned to keep everything organized, and regular meetings need to be scheduled. A standard assessment and prioritization process should be developed, with a staff position dedicated to managing IT decisions.
Organizations should also create a reporting mechanism so everyone can see the status of their IT plans and projects. Transparency will be key to keeping IT processes aligned to the organization’s budget and for keeping stakeholder interest high.
Build on Success
Past success is a key factor that influences funding choices in the future, Perez explained. That’s why it’s important to measure successes and give decision makers transparent information about the status of IT projects. Those decision makers will judge the outcomes of the project versus the cost and staff time that were dedicated.
For Palo Alto, stakeholders include the taxpayers, so the city created an open budget that gave the public the chance to see where money was going.
When seeking funding, it’s important to tell a story, Perez said. CIOs need to describe the problem using data analytics, establish relationships and understand the culture that they’re in, and identify potential solutions and their expected impact.
3 Trends Shaping the Future of IT Spending
CFOs also need to watch out for changing trends in technology, and CIOs can help them understand those ideas.
Perez listed what he sees as the three most important trends IT and Finance leaders need to look out for:
· Mobility – People these days are glued to their iPads and iPhones, so information has to be easily accessed by employees, customers, and others from these devices.
· Cloud computing – There was a big push for the organization to move to the cloud, Perez said, and cloud computing is often looked at as a cost-reduction tool.
· Big Data – Instead of older – and more time-consuming – ways of organizing and viewing data, Big Data will allow organizations to automatically collect and analyze information from a lot of different sources.
With less staff and a smaller budget, the City of Palo Alto – like all organizations – needs to be thorough in its research on what technologies are best for their organization. Keeping up with the trends, establishing relationships, and identifying potential solutions and their expected impact is key for presenting a budget case to decision makers.
The technology selection process shouldn’t just be the CFO making the decision – key stakeholders also need to be a part of the process to share their input.