How to get Budget for Modern ITSM Technology
by Markos Symeonides, on 24-Jul-2020 15:00:00
In the current context, CEOs and CFOs are focused on managing cash flow and are cautious about spending. But at the same time, many organizations have discovered that they don't have the ITSM tools they need to support home working at scale.
So how can you present a compelling business case to get the ITSM technology you need to survive and thrive in such challenging circumstances?
In this current environment, many organizations are operating with the shutters only half open. Retailers are focusing on ecommerce channels to do business. Many bricks-and-mortar businesses are rushing to catch up and move business online so that they can continue to generate revenue.
The organizations which are most advanced in their digital transformation are well positioned to survive in the current climate—and emerge as market leaders. Digital laggards need to accelerate their digital transformation journeys to remain competitive; to live to fight another day. Some won’t make it.
Most organizations are seeing a drop in revenue. For some industries, revenue from the “traditional” business model has dropped to zero—and they are making efforts to innovate new contact-free business models which allow them to continue doing business.
Decreasing revenue naturally means increasing scrutiny over spending. Organizations know they must control their cash flow to ensure operational costs are covered and they can continue trading. CEOs and CFOs are being super-vigilant about money. Their careers are currently balancing on their ability to control spending and keep their organizations running when nobody knows what is going to happen next.
Technology can Help you Survive and Thrive
However, as we saw in the “Great Recession” of 2007-2009, it was the companies that invested (instead of putting their investment pots into lockdown) that came out on top. Much of this investment was in technology. After all, technology is about efficiency and efficiency means streamlining.
Careful selection of the right technology can help an organization slash operational costs and retain a larger part of its income. Technology can help you balance-out falling revenue by dropping the cost of operations to maintain profit margins—while other, less efficient organizations are going to the wall.
Cautious CFOs are Looking for a Rock-Solid Business Case
The challenge lies in convincing a cautious CFO that the benefits of a new ITSM technology investment outweigh the costs and the risks.
It’s the CFOs job to strike a balance: to ensure continuity of cash flow but to also ensure progress is being made, in terms of growth. In a world driven by technology, there must be investment in technology for an organization to keep up with (or lead) the market.
Getting budget is never easy, but it just got a whole lot more difficult. It's correct that spending plans should be subjected to increased scrutiny. This is no time to let vanity projects slip through the net. The ROI of technology investments must be demonstrated clearly—and ITSM technology is no exception.
Getting budget in tough economic times relies on presenting a rock-solid business case—centered on cost reduction and control, and supported by enhanced value creation in terms of business productivity.
How to Build a Compelling Business Case
Because technology is about gaining efficiencies, it is effective to frame a technology investment in terms of future state versus current state: What will it cost us if we don’t do this? What cash is being wasted—right now and on a daily basis—which could be saved (making the organization more financially liquid)?
For example, the current cost per service desk is $22. If you give your staff an online portal for self-logging, the cost may drop to $9. The cost per ticket of not letting staff log their own issues is $13. $13 quantifies the efficiency that isn’t being achieved now.
This is just one example. Your business case should stack up a number of these quantifiable economic benefits to create a compelling case. When we’re talking about investing in a multi-faceted ITSM technology platform—covering many use cases, there is a lot of scope to build a credible cost-benefit analysis that compels the CFO to agree that the efficiencies to be gained far outweigh the cost and risk.
Support the Economic Argument with Less Tangible Benefits
A business case shouldn’t just be about the bottom line. Once you’ve made the economic case, you can then layer additional benefits on top of this to complement the economic case.
For the above example, investing in a web IT portal means you’re giving employees more choice in the way they interact with IT—increasing customer satisfaction. Improved IT customer satisfaction isn’t an economic benefit that the CFO can take to the bank, but it is a benefit to the organization.
Select SaaS Cloud ITSM Technology over On-Premise
When the CFO is so cautious about spending, large capital purchases are unlikely to get the green light—not because the long-term business case isn’t solid, but because it’s risky to commit large lump sums when nobody knows what will happen next. Funds might be needed to adapt supply chains, create new marketing campaigns, or even cover payroll. To reduce risk and keep cash in the bank, organizations should favor a subscription-based SaaS model when sourcing new ITSM technology.
To find out more, read our step-by-step guide for how you can create a winning business case for new technology.