The CIO Who Said No: What to Do When Your IT Leader Refuses to Cut Costs
Note: The following is a fictional story inspired by actual events.
As the CEO of a PE-backed portfolio company, Margaret had always understood the importance of investing in information technology to drive business growth and maintain a competitive edge. Unfortunately, there were never-ending spending surprises from IT, and it was always a "must-do" that could never quite be planned for.
Over the years, Margaret had grown increasingly frustrated with the CIO's constant excuses for why the IT budget couldn't be better controlled. The endless IT spending surprises took a toll on the rest of the business. Projects outside of IT were being delayed or scrapped altogether due to a lack of funding, and the company struggled to stay competitive in an increasingly tight market.
When Margaret and the CFO tried to address the spending issues with the CIO, they were met with hostility. The CIO seemed to take their concerns and initial thoughts on better controlling costs as a personal attack and became defensive and aggressive. "We can't outsource non-critical functions; the quality will suffer," the CIO would say, followed by, "Adopting a cloud-based model will compromise security." Margaret knew these excuses were just a way for the CIO to maintain control over the department and its budget.
Frustrated and at a loss for what to do, Margaret and the CFO decided to bring in an outside consultant to review the IT budget and operations. The consultant quickly identified many areas where costs could be cut without sacrificing quality:
- Outsourcing non-critical IT functions.
- Leveraging cloud computing and Software-as-a-Service (SaaS) platforms.
- Implementing IT automation.
- Renegotiating IT contracts and licensing agreements.
- Implementing an IT steering committee that included non-technical leaders.
Armed with this information, Margaret and the CFO presented a thoughtful case to the CIO for why a change was necessary and possible. As a result, they finally got the CIO on board, and together they implemented the recommended changes.
Thanks to their efforts, the company was able to reduce IT costs significantly, freeing up the budget for strategic initiatives that would drive growth. Additionally, the leadership team proved that it was possible to cut costs without sacrificing quality, which provided benefits for the company as a whole.
Are you facing difficulties in controlling IT costs? Would your company benefit from an outside perspective? Book a complimentary one-hour consultation with our team to discuss your goals via firstname.lastname@example.org or (310) 823-7560.