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4 keys to getting funding for your IT project

Bart Perkins | Aug. 17, 2016
A compelling case can work even outside of the annual budgeting process. In most enterprises, there’s always money somewhere.

Effective executive sponsors demonstrate commitment by publicly discussing the reasons why the program is important. The most dedicated sponsors announce that they are so committed to the program that they are willing to make realizing the projected benefits part of their performance plan and bonus criteria for the year.

Some proposals will affect all parts of the business, in which case the CFO, COO or CEO is likely to be the best sponsor and source of new funds. However, when the opportunity is relevant only to a single business unit, the head of that business unit is a better funding source. Business unit heads in large organizations usually have a great deal of discretion over their budget as long as revenue and profit goals are met. Business unit heads who believe that a project is critical to the business unit’s goals are usually able to find the necessary funds.

In many ways, getting business unit funding is the best outcome. By reallocating business unit funds to the project, the business unit head is making a very visible public commitment. Frequently, this convinces skeptics of the project’s importance while forcing the business unit sponsor to be actively involved in any trade-offs that must be made during the project.

  • Credible IT leadership. Success in getting new projects funded will depend greatly on the CIO and the IT organization having a history of successfully delivering projects that are visible and valuable to the business. Those that lack a history of successful projects (or worse, have a track record of project failures) usually get few resources during the annual planning process. Requests for additional resources outside the annual planning process are almost never honored without established credibility.

IT leadership that lacks a good reputation needs to take a hard look at itself, then develop a plan to improve. Without a history of delivering value to the enterprise, the IT organization has no hope of getting additional funds. So get out of the rut and build a plan to improve IT’s track record.

  • Organizational optimism. Requests for resources outside the normal budgeting process are best made when management feels positive. Good quarterly earnings, a major new client, a successful product launch — these are the sorts of things that are likely to inspire the optimism necessary to fund additional projects.

Conversely, it makes no sense to request additional money when management is distracted by a product recall, a government investigation, a new CEO, a hostile takeover or some other major setback. Proposing an unrelated project during a time of corporate chaos will label the requestor as naive and lacking business acumen. Even if the request was made before the external event was known, it is usually best to postpone the decision-making process.

 

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