Although global respondents to the 2018 CIO Agenda survey estimated 2018 budget increases at 3%, Canadian CIOs are looking at budget tightening with a 1.3% increase in IT funding. This is just under half of last year’s 3% increase, and means that CIOs need to be creative as they look for funding.
As budgets tighten, CIOs should move toward digital transformation. A combination of traditional and nontraditional means will enable them to secure funds to do so.
Cost optimization: Look outside IT for potential cost optimization opportunities to drive improved business performance. The difference between an average enterprise and one that is a best-in-class performer is typically 20% to 50% in costs, quality and/or speed. Don’t forget to take advantage of every cost optimization opportunity within IT as well.
Business-unit funding: Look for business units currently using shadow IT and embrace that as a mechanism to drive digital transformation across the company. Take advantage of properly governed, managed and guided shadow IT to create value for the organization.
Digital optimization: 42% of CEOs report their digital ambition is to achieve business optimization, according to the Gartner 2017 CEO Survey. Address top-level business objectives in eight ways:
- Improve existing revenue
- Reduce cost of goods sold
- Reduce selling, general and administrative
- Improve employee productivity
- Enhance customer experience
- Optimize inventory and yield
- Optimize physical assets
- Optimize financial assets and cash