What your CFO really needs in periods of economic uncertainty
The
pressure
is
on
to
navigate
economic
uncertainty.
Gartner’s
downward
revision
of
projected
worldwide
IT
spending
in
2023
from
5.1%
to
2.
The
pressure
is
on
to
navigate
economic
uncertainty.
Gartner’s
downward
revision
of
projected
worldwide
IT
spending
in
2023
from
5.1%
to
2.4%
growth
underscores
how
inflation,
interest
rate
fluctuations,
and
consumer
spending
are
reshaping
forecasts,
investment
portfolios,
and
the
CIO
agenda.
Regardless
of
your
company’s
investment
posture
during
this
period
of
instability,
interactions
with
the
CFO
have
likely
increased
and
become
more
consequential
in
the
last
few
months.
To
effectively
traverse
these
interactions,
CIOs
must
start
with
empathy.
Walk
in
the
shoes
of
the
CFO.
Acknowledge
that
they
are
fighting
a
battle
on
multiple
fronts,
from
investors,
creditors,
board
members,
regulators,
and
peers,
to
name
a
few.
Recognize
that
if
your
company’s
top
line
is
shrinking,
the
business
is
planning
to
recalibrate,
and
the
CFO
needs
your
help.
In
this
moment
of
need,
will
the
CFO
view
you
as
a
business-savvy
CIO
with
the
chops
to
take
on
an
expanded
role
in
the
C-Suite,
or
a
barrier
to
visibility
into
a
high-spend
function?
The
answer
hinges
on
your
ability
to
keep
tabs
on
three
related
topics
that
will
likely
surface
in
conversations
with
the
CFO.
Keep
tabs
on
the
keep
the
lights
on
(KTLO)
budget
If
you
fall
on
hard
times
in
your
personal
life,
you
pay
for
your
mortgage,
health
insurance,
and
groceries
first
to
cover
the
necessities:
shelter,
security,
and
food,
respectively.
What
are
the
necessities
in
your
IT
budget
to
keep
the
lights
on
(KTLO)?
All
things
related
to
maintaining
the
systems
to
land,
expand,
and
renew
business
at
forecasted
volumes
are
no
brainers.
Securing
the
technical
estate
from
bad
actors?
Of
course.
While
not
an
ideal
situation,
the
CFO
needs
to
know
what
the
IT
budget
could
be
if
the
company
shifted
towards
a
“KTLO
only”
posture.
To
get
here,
we
recommend
inventorying
spend
across
all
categories
(labor,
projects,
technology,
etc.)
to
identify
areas
that
could
be
paused
or
removed
and
estimating
financial
impact.
Solicit
input
from
trusted
deputies
and
document
the
risks
and
implications
of
specific
line
items.
Articulate
how
the
budget
could
look
in
terms
of
operating
and
capital
expenditure
over
the
next
12
months,
acknowledging
that
termination
clauses
and
knowledge
transfer
may
limit
the
speed
of
battening
down
the
hatches,
and
that
cancelling
some
investments
are
riskier
than
others.
Build
multiple
budget
scenarios
with
increasing
levels
of
cost
reduction
to
illustrate
the
plays
you
could
run
in
response
to
various
market
conditions.
Build
compelling
(and
corroborated)
cases
for
sustained
investments
If
there
are
non-KTLO
expenditures
that
you
believe
should
be
sustained,
be
prepared
to
explain
why.
Discuss
the
risky
ones.
Explain
the
tradeoffs.
Be
forthcoming
if
you
think
cutting
too
deep
in
the
short
run
will
lead
to
avoidable
expenses
in
the
future.
In
a
soft
market,
initiatives
that
buoy
margins
will
have
the
most
staying
power.
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