Growing a technology company isn’t only about raising new capital – it’s about wisely spending the resources you already have. No company of any size is immune to this principle, not even Google, as evidenced by its hire of all-star, Wall Street vetted CFO Ruth Porat, to rein in the behemoth company’s spending.
Porat’s hire this year indicates that the technology industry’s spending practices are maturing. It’s no longer only about funding and the fireworks of innovation. It’s time to plan for sustainability and long-term growth, and prepare for the financial needs of the company for decades to come.
As finance re-establishes its role in today’s maturing businesses, it’s time for the technology team to make some new friends. That friendship relies on learning how to consider projects from the perspective of asset allocation. The conversation starts with the project pitch, but will also rely on the relationship you’ve built with the department. In this slideshow, Henner Schliebs, vice president, Head of Global Finance Audience Marketing at SAP, has outlined what will be on finance leaders’ minds while they review your proposal.
Bringing IT and Finance Together
Click through for tips on how IT can improve its relationship with the Finance department and thereby improve service to the entire business, as identified by Henner Schliebs, vice president, Head of Global Finance Audience Marketing at SAP.
Focus on Results
The benefit of the technology should be the focus of your pitch. Qualitative forecasts absolutely have a place in this section, but be sure to include expected and specific quantitative results when possible. Finance views your proposal as a purchase and compares its importance against the other financial needs of the company.
Details and quantitative results are especially important for highly technical procurements. By fully explaining the benefits, you’ll be able to work past any misgivings that finance may have about not fully grasping what you’re asking for. After this information is laid out, transition to how the company will benefit, long term, from these changes. For example, a new server may allow for more flexibility with work location for current employees, allow for faster rendering of projects, and facilitate a higher level of productivity for remote workers with an improved remote experience.
Don’t forget to also look for any other benefits outside of the project – will it help with staff retention by giving them a more modern and desirable workflow? Will the new technology attract quality talent by marking the company as forward thinking?
Supplement Results with Key Costs and KPIs
Make sure to include case studies where you can, especially those that include numbers detailing growth as a result of the project. For example, if you’re suggesting that existing server hardware be replaced, it would be best to include:
- Age of current hardware and expected life span
- Cost of maintenance – has it grown over time as more maintenance had to be done and parts replaced?
- Expected cost when existing hardware breaks down irreparably, if new hardware is not in place. Include man hours in emergency fixes and delayed work, hardware costs to get the company back up and running as usual.
- Any other metrics that display the need for the project.
Highlight Where Flexibility Is Available
You’ll run into many projects that demand a specific solution, such as replacing elderly hardware. However, many challenges can also be met with a variety of actions, and it’s rare that there really is only one solution to a problem.
While it’s very tempting to assert that the solution that you and your team agree on is the superior option, the finance department has to weigh the decision against very different factors. While they will always defer to the team they’re purchasing a product for to guide them on the most robust and useful solution, they’ll also have to factor in the investment of time (for installation, training and any other preliminary activities) and money, any legal requirements that may be relevant, and standards that must be adhered to. If there are options that would be acceptable, make sure to include them in your pitch, with an explanation of pros and cons.
Be Budget and Cost Conscious
Finance is a balancing act – they’re working with one budget for the whole company. By proactively suggesting changes that could be made to reduce costs elsewhere, you’ll not only provide a roster of what is outdated, but also indicate your awareness of the company’s financial needs.
When compiling this section, make sure that the changes you suggest are ones that the company will be willing to make, and that they will not be hurtful to other departments. A well-done section on possible trades in services will do wonders for the effectiveness of your proposal, as they effectively reduce the cost of the project.
Cultivate an Ongoing Relationship
It’s a good idea to form a relationship early on with the finance team so that they are familiar with you and your team as people, are aware of your goals for the future, and are up to date on the triumphs and struggles of your projects. You’ll also know what the atmosphere is like in their department, which will help you not only better time your requests, but also know when a proactive suggestion for cost-savings would be appreciated, such as reporting that a software subscription is now rarely used, and could be cancelled.
By forming relationships with the finance team and discussing the needs of the company from both sides, you’ll be able to better anticipate each other’s needs – which means the company as a whole will run more efficiently. Goals will be achieved without the feeling that one department is undermining the other, and new opportunities will be able to be more easily explored.