- Though organizations across sectors are looking toward digital initiatives to transform business and help remain competitive, IT budgets aren't necessarily increasing. Instead, resources for digital efforts come from "self-funding," according to a Gartner report. And those digital initiatives are expected to help "win revenue" as opposed to driving cost savings.
- In response, CIOs have to think creatively about how to drive funding for digital efforts, looking at short- and long-term funding streams. To help fund digital shifts, companies can draw on financial reserves, which are set aside for internal reinvestment and could help accelerate digital transformation without making a serious financial impact, according to Gartner.
- But no two digital shifts are the same, meaning some organizations could look toward existing budgets to finance shifts, Gartner reports. In other organizations, it makes more sense for IT leaders to draw from existing budgets, allowing room for "relatively superficial" digital shifts over two to three years.
For companies to make headway on digital transformation efforts IT decision makers need a seat at the leadership table to discuss long-term technology investment, which will help guarantee business continuity.
Sure, the majority of companies expect IT budgets to stay the same — or even increase — next year, but that does not guarantee that those budgets will accommodate the investment required for digital transformation efforts.
If C-suite tension exists, it could make it difficult to argue the value of robust technology investment. IT is often seen as a cost center, which draws on corporate resources rather than contributing to the bottom line. So business leaders continue to see IT cost reduction as a continued priority, it could cripple a CIO's call for investing in technology to drive a digital shift.
Technology leaders are working to change the perception of business technology, shifting attention away from the idea that it's a cost center. For example, Gerri Martin-Flickinger, EVP and CTO of Starbucks, rebranded "IT" to "Starbucks Technology," to helping augment some of the "artificial restrictions" that IT had limits to what it could offer the business.
Many CIOs are now entering the C-suite with business backgrounds, working with stakeholders to communicate IT needs. Some are even turning to a spending methodology, Technology Business Management, to allow visibility into what's happening with IT budgets.