By Dave Woodcock
Over past months, business continuity has been shaken. For many, global anxieties created by the pandemic have led to budget cuts and a loss of investment confidence from financial decision-makers.
Therefore, IT teams have faced the challenge of needing to do more with less. While digital transformation initiatives have accelerated at an extreme pace, many CFOs have tightened their business purse-strings and are reluctant to think further about investing until they are convinced that it will deliver a tangible ROI.
Ironically, it is smart, confident investment that is likely to bring many businesses back from the edge and enable recovery, especially if it is in the right technologies to optimise and streamline processes, improve staff productivity and, ultimately, cultivate significant cost savings.
This year, global IT spend is set to grow by 6.2 per cent, taking the world total to an impressive $3.9 trillion. Although IT investment has been recognised as essential for business survival, the market is competitive and organisations looking to expand on their digital capabilities have plenty of options to choose from.
With the right messaging, sales teams can demonstrate to CFOs that it does not have to be a choice between innovation and savings
So how can an IT solutions provider stand out from the crowd? The best place to start is by establishing the right messaging that accurately reflects the current financial anxieties and continuing budget constraints felt by many businesses around the world.
ROI has never been more important than it is now, and CFOs need hard evidence that their investments will pay off. Packaging ROI messaging into a digestible, clear and exciting promise for CFOs and distilling the savings-focused sales pitch, can help drive the approval of unplanned purchases and allow companies to work on multiple projects simultaneously.
With the right messaging, sales teams can demonstrate to CFOs that it does not have to be a choice between innovation and savings. Instead, the former will inevitably lead to the latter.
Digital transformation must come from the top and filter down. Unfortunately, if a sales team is pitching to IT professionals, they are likely preaching to the converted.
These overstretched IT experts are already aware that they need more investment into better infrastructure visibility and a more secure Cloud service, yet requesting these improvements from the board of directors takes up even more time they are not willing to sacrifice.
Fortunately, the role of CFO is becoming increasingly involved with IT and network security teams, as the previous year haa shown the importance of embracing digital transformation and encouraging security-first mindsets.
Yet while CFOs may be more understanding of the challenges faced by IT teams, each financial decision will still be guided by ROI. It is therefore essential to embed finance teams into investment decisions and consult them from the start. CFOs understand what is affordable to the business, and what is simply unachievable, so targeting the top means avoiding time wasted selling to the wrong department.
Gartner reported a 10.3 per cent decline in data centre spending last year. However, the predicted investment into data centres across 2021 is at 5.2 per cent, which is the second largest growth prediction in the IT industry.
Strong and targeted messaging about cost savings should not be a short-term plan. Instead, it should be a focus for at least the next few quarters
This example shows us that, while financial constraints caused by the pandemic saw a dramatic reduction in spending, technology and innovation investment remains a huge priority. There will be dramatic IT spend this year, but it may simply be more carefully considered than ever before.
When delivering an effective ROI message, it is important to focus on hard rather than soft savings. For a CFO, customer satisfaction is not a priority and measurable interest. Instead, they are looking for quantitative ROI and impressive cost-savings that mean their investment will soon begin to pay for itself.
Examples of hard savings will mean that a board of directors feel far more comfortable and secure in their decision, while offering data to support any requests will help two-fold. Whether using information on cost savings from previous clients, or even leveraging data from interested customers and transforming hypothetical investment into credible and promising ROI, the proof will help the purchase.
While the rest of 2021 offers a more promising post-vaccine future, it is unlikely that financial pressures will disappear. It is therefore important to focus on clearly communicating the importance of investing in digital transformation initiatives as a way to overcome current and continuing business challenges.
Strong and targeted messaging about cost savings should not be a short-term plan. Instead, it should be a focus for at least the next few quarters. As every organisation is looking to emerge victorious after a challenging year, IT teams are hoping to optimise their digital operations, while CFOs want the best ROI offerings.
It is important to be both realistic about the current constraints facing organisations worldwide, as well as being confident and clear about the impressive ROI that betters competitor cost savings. By delivering effective, targeted messaging that highlights the importance of digital transformation to thrive in the new tomorrow, CFOs and IT leaders alike will struggle to ignore the exciting potential of technological innovation.
Dave Woodcock is VP EMEA of Gigamon