In these times of tightened budgets , it is more difficult than ever to get executive approval for capital expenditures. IT managers must do their homework before they make presentations to pitch their projects. Use the following tips to help get your proposals the nod from upper management.
1. Learn what management values. The operational efficiencies that seem so obviously desirable to you may not resonate with your company's top brass. You have to find out what executives' high-level goals are and align your argument for money with those goals. For example, if management wants a 10 percent increase in market share, then it stands to reason that you're going to need a 10 percent budget increase to expand the network.
2. Propose projects in management terms, not technical terms. What matters to management is the bottom line — how much additional profit a project will generate. The extra profit may come in the form of more revenue or in cost savings, but either way, your proposal should be couched in terms of its ROI (return on investment). It may be advisable to take some financial courses so that you can speak the language of ROI, internal rate of return and so on.
3. Show management case studies and examples that support your point for cost savings or revenue enhancement. A search of the Web may turn up many examples even within your business's own industry.
4. Find ways to minimize the project's expense. There may be government grants available for "green " projects, for instance, for which your plan to replace old servers with more energy-efficient machines can qualify. Investments that generate new jobs may qualify for state and local tax credits.
5. If your department's IT budget isn't big enough, get help from another department. Some other departments must benefit from your proposed project or there would be no point in pitching it. Get the department that has a stake in the project's success to share the cost. Management will take such commitments as a sign that the project has a broad base of support.
6. Break up the project into easy-to-swallow pieces. It is much easier to get partial funding commitments with promises to consider the rest once results are shown than it is to get the whole sum up front. Spreading expenditures out over time also appeals to financial managers, who are sensitive to the time value of money. The longer these executives can hold on to cash, the more interest the company can earn on it.
7. Look for ways to outsource part of the project. It is often less expensive to pay an outside firm to monitor a network, for example, than it is to buy expensive network-monitoring software. Also, CFOs feel more comfortable with services that they can turn off at almost any time versus in-house investments in equipment, software and staffing.
8. Pick your battles carefully. If your requests for money are constantly turned down, it becomes a matter of habit for executives to say "no" whenever you propose a new project. But if you ask for money only when it is really needed for the good of the company, then your requests will be taken more seriously.
Getting top managers to buy your project proposal is mainly a matter of learning to think like a top manager. Put the proposal in terms that executives understand and minimize their risks, and the project will stand a much better chance of getting approved.
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