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Create a Culture of IT Smart Spending

by Daniel Sanchez Reina  |  August 24, 2020  |  Submit a Comment

Do you cut costs in times of recession? Do you spend generously in times of prosperity? Both are the wrong approach. Adopt a ‘Smart Spending’ culture.

 

Smart spending is not an easy discipline to ingrain in the culture of the IT organization. It requires IT financial maturity to understand the impact of IT financial decisions on the business.

The return on IT investments is unclear

One third of IT organizations struggle or have no plans to achieve IT financial maturity. Without such maturity, it is difficult to convey the value of IT for the enterprise in an understandable and business-oriented manner. Everybody understands the value of IT from a conceptual perspective, within the current context of massive business transformations. However, that does not necessarily correlate with a clear comprehension of the return on IT investments. In fact, one third of executive business leaders do not clearly understand such return.

Link IT Finance to Business Value

Without a transparent link of IT finance to valued business services, neither cost cutting nor investment will make the business more efficient. Continued cost cutting by eliminating and rationalizing services or squeezing suppliers further to drive down unit costs will, in time, inevitably impact the service deliverables IT can provide. Likewise, generous spending, without taking into consideration the value it drives to the business, will hinder business growth.

Change your IT Finance culture

IT financial culture must be mature enough to link spending to the business services IT delivers. With this culture, informed decisions can be made, and the CIO and IT leaders will be more influential and listened to by those at the executive table. Creating such a culture consists of applying three sequential actions:

 

IT Smart Spending

 

If you wish to know how to put in place each of those actions, see Gartner’s document “Create a Culture of IT Smart Spending”.

 

May wisdom and courage be with you.

 

Daniel Sanchez-Reina

 

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— I will be looking forward to talking to you. Feel free to schedule an inquiry call (inquiry@gartner.com), follow me on Twitter (@DanielSnchezRna) or connect with me onĀ LinkedIn.

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Category: cio-leadership-culture-and-people  critical-skills-and-competency-development  driving-cost-optimization-across-the-enterprise-finance  working-with-the-ceoboardc-suite  

Tags: cost-optimization  it-costs  it-investments  smart-spending  

Daniel Sanchez Reina
Senior Director Analyst
3 years at Gartner
9 years IT Industry

Daniel Sanchez Reina is a Senior Director Analyst for Gartner's Leadership, Culture and People Dynamics team for the CIO Research group. It includes the complex challenges of High-Performing Teams, Organizational and Cultural Change, Leadership Skills and Competencies, and Digital Transformation initiatives. Research on a worldwide basis, advising clients on their specific needs to achieve sustainable growth.. Read Full Bio




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