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CIO’s Guide to Great IT Budgets

August 3, 2010/0 Comments/in CIO, CIOs, IT Budgets, IT Department, IT Industry, IT Professionals, IT Projects, IT Spending/by admin

Some CIOs always seem to be plush with funds and have great IT Budgets. This article looks at some critical factors which influence IT Budgets.

Year on year most CIOs are facing a downward pressure on their IT spends. IT surveys in last year and year before have shown that IT spends either remained the same or increased only marginally. Even the marginal increase mainly is attributed to increasing man power costs and costs of maintenance. However some CIOs always seem to be plush with funds and have great IT Budgets. Most others who do not fall in this category attribute it to organisation’s culture (IT savy), or great boards, amazing sponsors and many other things – other than the CIOs ability to obtain the budgets. However obtaining Great IT Budgets is a skill. This article presents a few principles on how to get approvals for great budgets. (Here we take into consideration only budgets approved during normal operations of the company. In special cases such during Fund Raising, IPO, M&A – getting budgets is a different ball game).

I do not like to oversimplify things. However two important principles which lead to great IT budgets are great projects and great selling.
Great Projects

Ask any CIO and he would have at least 3 to 4 large IT projects running in parallel (and possibly on miserably low budgets). The primary reason for the low budgets is that most projects which are selected and presented to the board (or committee etc.) don’t fit the requirements of strategic projects. If you look at the IT project classification grid – where does most of your IT Budget go? Most CIOs spenGrid2d maximum amount of budgets on “support” projects (mainly because these are critical for sustaining present operations), and on “factory” projects – projects which improve efficiencies. While these two types of projects are important – these will continually face a downward pressure on budgets as these are seen as ‘necessary evil’ rather than value adding activities. Great projects are the ones which fall in the category of “Turn around” and “Strategic”. These projects hold a promise of improvement in revenue – top line and bottom lines and becoming a great differentiator spiralling companies growth.

Indentifying Strategic Projects involves number of techniques – including innovation techniques such as Systematic Inventive Thinking (which I am great admirer of), brain storming, Deep Diving, strategic workshops, etc. I will dwell into some of these topics in some of my other posts. However one thing is sure that strategic projects can rarely be identified by looking at what competition is doing.

For any CIO, it is essential to first assess where his projects lie in the above strategic grid. Once he is sure that he has a great new project which is a strategic or a turnaround project, it’s time to move on to the next step – selling the project.
Great Selling
Most CIOs / CTOs require the approval of some committee, board, or sometimes a person for their IT Budgets. It is not enough to have a great project (or line up of projects) to obtain budgets. Many times the most promising projects are shelved because lack of budgets. What the CIOs generally ignore is that however great the idea – it needs to be sold. Here I give four simple rules by which you can sell your project effectively to your board.

1. TALK BUSINESS: Start with how the project is going to improve revenues and efficiencies. Present NUMBERS. Do not go through the usual rant of business requirements, approach, specifications approach etc. No one is interested in these. Talk MONEY, talk about CUSTOMER, talk DIFFERNTIATION. Do not talk specifications.

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IT Spending: Let your budget be free

July 30, 2010/0 Comments/in IT, IT Budgets, IT Department, IT Field, IT Hiring, IT Spending, IT Staff Augmentation, IT Staffing, IT talent, IT Workers/by admin

If you were looking for some ammo to get your budget increased for the coming fiscal year, Forrester has got your back with arguments why CEOs should stop limiting their IT budget allocations.

The gist of the argument is that putting CIOs under budget pressure forces them to spend on maintaining current operations rather than helping to grow the business. This isn’t a particularly universal argument; there are a lot of shops where IT really doesn’t have any clear or positive ROI avenues to contribute to business growth. The idea that new initiatives can contribute to efficiency and stability, though, can be easily substituted.

But the real problem with the Forrester argument is that they are probably advancing ideas that CEOs are already familiar with, and have rejected. More than once I have come across CEOs that squeeze IT budgets explicitly to prevent growth… growth in IT, at least. That is, after all, what they most frequently get for their invested IT dollars… new systems, more ongoing maintenance costs. There is no faster way to exist the CEO’s office than to come to him presenting as a positive something he has already mentally adjusted to as a negative.

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Programming, Development Skills in Demand

July 27, 2010/0 Comments/in IT Programmers/by admin

Job opportunities for technology professionals are fluctuating in the United States, but programming and development skills are hot across the country–especially in Java/J2EE. In New York City, IT managers and networking analysts have also seen a sharp increase in demand.

If you can code, you can get work.

Demand for C#, Java/J2EE, .Net, Oracle, Sharepoint and SAP skills are very high, according to a July report from IT job board Dice, which surveyed recruiters and human resource professionals.

“Not only is demand strong for these professionals, but these positions as a group pay on average $10,000 more than the average national paycheck for tech professionals,” said Tom Silver, senior vice president of Dice, in a statement. “And confirming their coveted in-demand status, these IT pros are receiving double the pay raise this year, as compared to technology professionals as a whole.”

The No. 1 programming and development skill in demand is Java/J2EE with more than 14,000 open job positions nationally, according to Dice.

“Java/J2EE professionals are tough to recruit with one respondent noting there are just not enough developers on the market and too many openings,” said Silver. “For .Net programmers experience is key, as hiring managers are looking for IT professionals who’ve demonstrated their prowess in this framework. And for those with C# know-how, the average paycheck is $89,400 and there are open positions in 48 states including Alabama, Texas, New York and California.”

Other skills in demand include security analysts of all flavors and those with federal security clearances and database administrators. The single largest metropolitan area in the United States with IT job demand is New York City with more than 8,200 openings. In second place, Washington, D.C., with 7,400 which is followed by Silicon Valley at 4,400; Chicago and Los Angeles have more than 2,800 each; Atlanta, Seattle and Dallas have more than 2,000 each; And, lastly, Philadelphia has more than 1,600 openings.

In New York City, job openings have climbed mightily for IT management and network communication analysts, which have grown by more than 60 percent, according to government figures analyzed by Pace University, which published its quarterly Pace/Skillproof IT Index report in July.

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After Pay Cuts, IT Workers May Seek Payback in New Job

July 23, 2010/0 Comments/in Information Technology, information technology budgets, Information Technology Field, Information Technology Organizations, Information Technology Projects, information technology spending, IT, IT Budgets, IT Candidates, IT Department, IT Field, IT Hiring, IT Industry, IT Jobs, IT Professionals, IT Projects, IT Staff, IT Staff Augmentation, IT Staffing, IT talent, IT Workers/by admin

A Harris Interactive survey found that IT workers see an improving economy — and an opportunity to start looking for a better job.

Cross posted from Computerworld

Computerworld — It may be matter of debate whether the IT job market is improving.

Certainly, for Eli Lilly and Co.’s (LLY) IT workers who are facing a layoff, the state of the job market is clear. The pharmaceutical company last week said it plans to cut 340 IT jobs on top of 140 positions cut earlier this year.

Eli Lilly employs some 1,250 IT workers in the U.S. and said the IT cuts are part of an overall restructuring of more than 5,000 workers nationwide, a company spokesman said, confirming a report in the Indianapolis Star , hometown newspaper in the city where Eli Lilly is based.

Despite the woes in the Eli Lilly IT operation, national IT hiring indexes have been showing fluttering month-to-month increases , and a new survey conducted by Harris (HRS) Interactive found that confidence among tech workers in the economy is on the rise.

Harris surveyed 4,367 employed tech workers, including 241 in IT operations, in the second quarter of 2010 and found that 38% of the IT workers believe the economy is getting stronger, compared to 32% in the first quarter.

The survey, dubbed the IT Employee Confidence Index, was conducted by Harris on behalf of Technisource Inc., a national staffing and recruiting firm.

The breakout data from the survey could portent trouble for IT managers and companies now relying on fewer IT employees.

For example, the survey results provides evidence that many IT workers may already be preparing to look for new jobs over the next year.

Harris said that 61% of IT workers earning between $35,000 and $50,000 a year are "likely" to start looking for a new job over the next 12 months. Meanwhile, 27% of IT workers now making between $50,000 and $75,000 annually and 36% of those whose salaries exceed $75,000 are "likely" to begin a job search.

"In some areas, salaries were cut or certainly salary increases were suspended," said Sean Ebner, a regional vice president at Technisource. And, he added, "as cuts were made in IT, the remaining staff was asked to do significantly more without additional compensation. It really did create some pent-up animosity."

Ebner said the survey found more interest in seeking new jobs than ever before.

The willingness to look for new jobs doesn’t yet mean the job will be there. For instance, only 27% of IT workers earning between $35,000 and $50,000 indicated that they expect more jobs will be available to them.

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2010 IT spending still looks strong, Forrester says

July 22, 2010/0 Comments/in IT Budgets, IT Hiring, IT Job Growth, IT Spending, Technical Staffing, Technology Budgets, Technology Projects/by admin

IDG News Service – Despite fears caused by the European debt crisis, spending on technology products and services is set to continue growing around the world, although the pace of growth in Europe overall will be lower, Forrester Research said in a report released Tuesday.

U.S. IT goods and services spending will jump 9.9% in 2010 to $564 billion, compared to 7.8% growth worldwide to $1.58 trillion, Forrester said.

Canada will experience the highest IT spending growth this year with a 16.2% rise, according to Forrester. IT spending in Latin America is set to grow 15.4%, followed by Asia-Pacific with 11%. Eastern Europe, the Middle East and Africa will see a 10.5% uptick.

But IT spending in Western and Central Europe is set to drop by 0.7% due to the debt crisis and the weak euro.

The US 2010 forecast represents a 1.5% increase over one Forrester gave in April, while the global growth rate remained roughly the same as the previous forecast of 7.7%.

Growth is being spurred partly by the fact that the U.S., and to a lesser extent, other nations, are entering an innovation cycle marked by adoption of new technologies, Forrester said.

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How to Thrive in Today’s Job Market: Five Tips for IT Professionals

July 16, 2010/0 Comments/in IT Department, IT Professionals, Job Tips/by admin

The days of the IT department existing in the back office and not communicating with the front of the business are gone. IT professionals need to take a leadership role, take initiative when making decisions and understand the business. Here, Knowledge Center contributor Rich Milgram outlines the skill sets IT professionals need in order to improve their career and thrive in today’s job market.

You’re an IT professional. So it’s time to become aware of the changes happening in your industry and understand how they could affect your job and your company. You’ve had it pretty good over the years, but it’s no longer enough to simply be a “ticket taker” for your next project, leaving the strategy and big picture company goals to management.

To succeed in your career, it is important to demonstrate consistent value to your employer and take initiative when making decisions for the best interest of the company. Employers are more likely to hire and retain workers who carry out multiple technical functions in the business. They value those who understand how to leverage their knowledge to deliver the right technology to achieve company goals.

While there may not be a universal skill or attribute that can guarantee job security, here are five tips on how to position yourself as the indispensible go-to IT professional in your company.

Tip No. 1: Understand and apply project management and people management skills to your job

One of the most powerful ways to increase your job security is to understand the strategic direction of your company and how it relates to your position so you can make the most impact on the bottom line. As an IT professional, you are much more desirable if you understand project management, business process reengineering, and can effectively work and communicate with the management team.

These skills allow you to be more self-directed and not only do your job, but make wise decisions on how to tailor your work efforts to directly affect the profitability and success of the company.

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Executive Q&A: Citi’s Jon Beyman on IT Talent

July 14, 2010/0 Comments/in IT talent/by admin

By Greg MacSweeney

Read the Original Article at Bank Systems & Technology

Jon Beyman, managing director of operations and technology for the global institutional client group at Citi, has a long track record of driving technology and financial innovation. Before joining Citi in 2008, he was CIO at Credit Suisse, and prior to that he was the long-time CIO at Lehman Brothers, so he has a pretty good perspective on the state of innovation in the U.S. financial services industry. Beyman discusses with Greg MacSweeney, editor-in-chief of Bank Systems & Technology sibling brand Wall Street & Technology, financial firms’ search for technology talent and the dangers of the United States falling behind other regions in the race to lead global technology development.

What is the state of technology development in financial services? Are you concerned with the pace and rate of innovation?

BEYMAN: I am most concerned with providing technology solutions that help drive the revenue generation, risk management, efficiency and productivity of the businesses that we support. The technology that I provide needs to be closely aligned with business goals and needs to be aimed at business goals.

A large part of the innovation equation is finding technology talent. Some experts say it is hard to find enough technology talent here in the United States. Are domestic firms having trouble finding qualified technologists?

It is an interesting question. The answer is “no” here at Citi. Honestly, because of the nature of these businesses that we are in and in particular, the trading businesses, it attracts smart people because it pays very well. But to meet my goals, I need great technologists, and I need these technologists to have a lot of domain expertise — they need financial services knowledge.

For a long time, people have said that the best and brightest technologists have been going to Wall Street in search of wealth rather than pursuing engineering or software development, fields in which their compensation would be lower. Given the struggles and bad publicity the financial industry has experienced in the past two years, will the best and brightest software developers and quants turn away from Wall Street?

I suspect it is too soon to tell. There are always people who are going to make as much money as they can. Wall Street doesn’t have the star attraction it had a few years ago, and a lot of what has gone wrong in the economy is being laid at the feet of Wall Street firms.

Certainly there are people who will refuse to work on Wall Street and will work in other industries for less money. But there are also people who are designing systems and technology who say, “I’m just working on technology; I’m not hurting the economy.”

If there is a sustained period of time when there is no compensation difference between financial services and a software developer in another industry, then it might become an issue. But that is not the case right now. Financial firms still pay more for technology talent, and I am in a war for talent with other firms. [For more on IT salary and compensation trends in banking and the capital markets, see this month’s Special Report for the results of the exclusive InformationWeek Analytics 2010 IT Salary Survey, page 28.]

Do you think the current state of education in the United States is preparing enough software developers/engineers/technologists to sustain technology innovation in the U.S.?

We don’t exist in isolation. There are an awful lot of technologists who work in the U.S. and they were not native born. The question is if the combination of people wanting to come to the country and the U.S. graduation rates are enough to sustain the level of innovation domestically. There is a certain level of technology job that can be done anywhere in the world.

My broad answer is, we will always be able to find talented people — as long as there is no societal restriction on the people getting into this country. But if there was no access to external talent available, I don’t think the U.S. schools are training enough qualified people.

What are some of the dangers if the U.S. falls behind in terms of financial innovation?

The only way that would happen would be if there were no way to attract talent to the places where the financial markets are located. But the jobs we are talking about in financial services need to be in certain areas — where the innovative companies are and where the innovative work is being done. Right now, that is happening in the U.S.

India is not a deep financial liquidity pool, though there is a lot of technology there. The advantage the U.S. has is that it is still the biggest and largest and deepest financial market in the world. As a practical matter, you need to be here both for the business and for certain types of technology development if you are a financial firm. I don’t see China or another country becoming a large financial center anytime soon. It could be that other markets grow faster because of regulatory constraints on trading activity or IPOs. But the regulators around the world have learned that the different liquidity centers need to adopt similar rules.

China does not have a deep and liquid capital market. Capitalism works on rewards, and stock markets grow up around where capital providers can build returns on capital. The fear that the financial markets have is not that we are going to lose all business to China. I have not ever heard that expressed. There is a lot of development in China, but there is a lot of Chinese financial investment here in the U.S. because the U.S. has the liquid market.

What are the dangers if the U.S. falls behind in terms of technology innovation?

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Dilemma: IT Staffing Solution- Staff Augmentation (part II)

July 12, 2010/0 Comments/in Information Technology, Information Technology Organizations, IT Consulting, IT Staff, IT Staff Augmentation, IT Staffing/by admin

Here’s a continuation of my previous post about staff augmentation. Another consulting client had a very short term project that required a specific skill set that no one on her staff possessed. The intricacy of the project required that our engineer become part of the IT team and interact regularly with marketing and senior management. Handling that as a fixed priced project would not have worked for us or them. We were able to provide an experienced engineer to become a temporary part of the staff and complete the development in just a few weeks. That engineer had at his disposal our entire team of engineers and project managers to offer advice and guidance as the project progressed. This is another significant advantage to the client. The staff augmenting engineer of a solid integrator has an impressive team on their staff and can access that team at any time. Compare that to a new hire coming into the company. He or she may have contacts from previous jobs, or a network of peers in the industry but it is not the same as having fellow employees who have a strong vested interest in the success of the engagement.

Just as the engineer has an opportunity to bond more closely with the client, a big plus for the integrator, the client gains significant visibility with the integrator. I am a huge fan of tight, loyal, long term relationships between integrators and their clients. It is much better for both businesses in the long term. The very process of staff augmentation goes a long way in strengthening the relationship.

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Dilemma: IT Staffing Solution- Staff Augmentation (part I)

July 10, 2010/0 Comments/in IT Consulting, IT Staff, IT Staff Augmentation, IT Staffing, IT talent/by admin

“We interviewed for six months for this position, and then gave this guy six months to prove himself, but he just hasn’t worked out.” a frustrated client explained to me just last week. “Now the head of that team has given her notice, and will be gone in two weeks! It’s just extremely frustrating” she went on to say.

Unfortunately this type of problem is a regular occurrence for small to medium sized businesses trying to build and/or keep their IT staffs intact, happy, and motivated. This recession, which many IT managers had hoped would provide a much needed reprieve from the incredible challenge of finding the right IT talent, has brought little relief. It is just as difficult to recruit and keep exceptional IT talent as it has ever been. There is a solution however, that I have seen work well for many companies willing to think outside the box a bit. I refer to it as “staff augmentation, basically bringing in outside personnel to augment your current staff from time to time”.

You see, there are many solid IT integration companies that have talented IT engineers with a wealth of knowledge of a variety of networking solutions. These are very expensive people to keep on staff. For integrators, keeping these engineers busy on billable projects is crucial to their profitability. Utilizing this talent in staff augmentation roles on a regular basis has many advantages. The first and most obvious is that such an engagement is usually billed by the hour, making the engineer’s billable hours 100% percentage billable100%. The second is that it can provide a degree of stability for the engineer who can report to the same site, with the same hours, for a specific period of time. That can be a welcome break for an engineer who has been all over the map juggling a variety of projects. It also allows the engineer to form much tighter working relationships with key staff at a valuable client. From the integration company’s perspective it can be a real win.

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