Why IT budgets are like bank loans

I first started work in computing and IT in 1985, before many of Concur’s team members were going to school or even born. Back then, IT budgets were big – millions of dollars for huge systems roll-outs that could take years to complete. If you were on the customer-side, you’d choose a vendor with a good reputation, wait, and hope for the best. Sometimes, you’d be waiting an awful long time!

Like the dinosaurs, those big IT budgets are heading towards extinction, replaced by far nimbler ways of adopting technology. Business leaders no longer have the patience to sink large fractions of their (increasingly tight) budgets into mammoth IT projects, then wait for years to see even the slightest trace of ROI.

And why should they? Their competitors, particularly start-ups, get results from their tech investments within weeks or even days, and if they don’t, they write off the costs as a learning experience and try again.

Nowadays, corporate IT budgets are starting to look a lot like bank loans. The C-suite lends you a little bit of money to demonstrate your idea at a smaller scale. If you can show real results, they’ll extend your line of credit, maybe with a slightly larger sum. Prove your concept again and they raise the size of the loan, and so on.

I believe this has three big implications for CIOs, IT teams, and anyone hoping to transform their business with technology (including other members of the C-suite).

First, you have to think big but start small. Your grand IT plan needs to include a 30- or 90-day roadmap with clear, measurable outcomes that it can achieve in that time. This is one of Concur’s sweet spots: a lot of our customers adopt our platform because it can deliver quick and extremely visible improvements to employees’ experience of T&E claims.

It’s important to have quantifiable outcomes to aim for as well. For my team, we tend to aim for around 70% of our customers’ organizations to be actively using our platform within the first 2-3 months of implementation. This encourages us to get down to details from the very start: in those initial few weeks, we’ll be talking constantly to our customers about user experiences, country-specific issues, and other seemingly small details. If you’re operating to a short timeframe you can’t afford to slack on any detail – that’s something most start-ups know and use to their advantage.

Second, successful IT projects depend on a steady buildup of trust. Non-technical executives are increasingly skeptical of the promises of IT (and no wonder, given the press that large-scale IT failures get). If you want the funding to keep flowing, invest in strong relationships with them as well as your end-users: the employees. The benefits and experience of any new technology should be as good as what they’d get outside the office – otherwise, why bring it in? The more you talk to those employees, the more likely you’ll be to get the results that justify a bigger “loan”.

Big IT budgets are dying out, but many CIOs still don’t seem to have come to terms with this. I’d encourage them to look at the startups that are nipping at their heels, and learn from their example to be smaller and nimbler with the very scope of their projects. I’ve been in the IT business long enough to be called a fossil by some, but I’m much more keen on evolving than living out the last of my days.