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Nov 19

How the CIO Can Sell the CFO a Collaboration Solution

Posted by Bill Gerneglia in Untagged 

Bill Gerneglia
Caution CFOs, your CIO may soon ask you to finance a business collaboration  technology solution.
Leveraging the best that technology has to offer is always a challenge. CIOs are constantly struggling with how best to articulate to the rest of the C-Suite and especially the CFO of the value proposition of an essential piece of enterprise technology.  Procuring and deploying the right business collaboration technology solution is no exception. As CIOs want the best technology available for their end users,  CFOs  will typically require some practical financial answers when it comes to acquiring “the latest and greatest” particularly with IT. 
Technology innovation occurs almost daily and product refresh rates are routinely compressed to shorter and shorter intervals.  No sooner has the latest, greatest solution been deployed than a newer, better solution emerges. As the CIO of your organization you are faced with the reality that your business operates in a world where 40% of many workforces are mobile at any given point in time. It is important that you discover and introduce innovative technologies to let employees come together in groups to collaborate to do work from remote locations. The ultimate goal of the CIO in deployment of a collaborative technology solution is to deliver some type of business benefit such as faster problem resolution, more innovative ideas and quicker time to market new products. 
Hosted collaborative technology solutions can offer the potential to upgrade the business and functional applications rapidly with an ROI period that is short and simple to calculate.  Infrastructure cloud based collaborative solutions help to minimize the risk in making these investments as they are scalable for future growth and offer a minimized footprint in a virtualized environment.
The CIO should argue for investment in cloud based collaboration services because these investments in IT are truly providing competitive differentiation.  This stems from the current global trend in cloud computing where the cloud is shifting IT toward a utility model.
 Some business units within an organization desire the self-service, self-reliance choice of selecting and procuring their own SaaS solution.  CIOs can provide outside cloud based collaborative services that can provide independent operating business units with a feeling of empowerment. They can schedule, configure, coordinate, and collaborate across remote locations using the online tools of their choice all while staying in a single integrated product family.

Are you ready to have the conversation with your CFO? 
When CIOs ask for financial resources to support say a business collaboration solution, CFOs will typically ask for additional cost justification or an extensive ROI analysis.  CIOs should expect this and be prepared. CIOs should be confident that their informed purchasing recommendation is based on demonstrations and experiences which they know to be the right action at the right time for their organization. The CIO simply needs to document the request and put it in a form the CFO can understand.

It is important for the CIO to understand why the CFO has made the request for ROI calculations. Technology spending typically represents the biggest single area of capital expenditures within most organizations. Couple that with the kind of clout that CFOs typically gain during tough economic times along with the increase in regulatory and compliance activities in recent years (i.e. Sarbanes-Oxley) and it stands to reason why many  CIOs and IT organizations now fall under the CFO’s watch.
CIOs can make the following arguments to the CFO to win their financial support for the deployment of collaborative technologies.
The reasons for adopting cloud based collaboration services are clear: Cloud Computing has the ability to change the way the technology industry itself is shaped as Cloud has changed the computer pricing model. An organization can potentially buy capacity as I needed it and pay for it as Operating Expense instead of Capital Expense. This has the effect of enabling innovation because you may rapidly select a technology solution and deploy it very quickly.

Inform the CFO that by deploying your suggested collaboration solution the entire organization will have anytime, anywhere access to real-time business collaboration services.  The single biggest advantage of running business collaborative solutions in the cloud is that employees can be anywhere and have full access to each key system element through nearly any Internet-enabled device. Your company does not need to build out a complicated VPN. The cloud based collaboration service lends itself to improving access and accuracy of data and in many cases end user accountability.

While many companies adopt cloud applications with the assumption that positive ROI is a given, their main drivers for making the jump to the cloud are to gain overall process efficiencies and to run their businesses better, faster and cheaper. A survey by the Sand Hill Group recently found that increased business agility and cost efficiency are the key drivers for cloud adoption.

While the decision to move to the cloud is about investment justification for the CFO, it is also about using this technology to improve performance around key areas of the business and to drive the desired behaviors from both the CIOs team and the organization at large. The collaboration tools you select need to enable your organizations’ vision and strategy in order to drive the correct process and behaviors. By using the cloud to target opportunities and motivate people, business collaboration investments are ultimately justified.

To make the case for the investment to the CFO you can point out that the rules of funding a business collaboration deployment are the same no matter the size your company. To properly evaluate the project's feasibility, you must be able to compare the expected cost of the project against the expected value to the organization. With most IT projects, the future value of an investment is easy to predict by considering savings, efficiency gains or the reuse of existing resources. Simple forecasting methodology can then be used to calculate a potential return on investment (ROI) to determine a course of action. It is a tried-and-true method, and one the CFO understands. 
By starting with a small group and building on early collaboration technology roll out successes you can focus the CFO on the overall advantages to all the end users in the organization.
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