This is the third of four articles that explore the outlook for technology spending — and why corporate tech budgets are bound to rise. The other three are IT Outlays Are Poised for Takeoff, which looks at what’s driving the burgeoning budgetsCFOs Holding CIOS’ Feet to the Fire, which looks at how finance chiefs asking top tech execs to justify spending; and Effective Tech Spending: a CFO’s View, in which a finance chief tells why her peers need to know a whole lot more about IT.


As more companies adopt cloud computing solutions, some experts see a migration of budgets for information technology to the division or business-unit level, down from the corporate level.

One aspect of cloud computing that is driving the budgeting change is how quickly cloud solutions can be implemented, said Thoran Rodrigues, the owner of BigData Corp. in Rio de Janeiro, which provides cloud-based big-data services.

Before the advent of cloud solutions, IT projects typically required large upfront investments that were amortized over several years, and the benefits weren’t realized until at least a couple of years had passed, Rodrigues said. For the budgeting process, that meant more IT projects had to be considered on the corporate level and with a strategic, long-term view.

With cloud solutions, the benefits of an IT project are realized much faster—in six months or even three months, Rodrigues said. So in many cases, IT spending decisions are changing from strategic decisions to tactical decisions, which puts them at the division or business unit level of a company.

The Future of Finance Has Arrived

The pace with which finance functions are employing automation and advanced technologies is quickening. Rapidly. A new survey of senior finance executives by Grant Thornton and CFO Research revealed that, for just about every key finance discipline, the use of advanced technologies has increased dramatically in the past 12 months.

Read More

IT spending decisions “can be made at the tactical level with greater affect because these projects can be done more quickly and the benefits are realized more quickly,” he said.

As technology advances, division managers must be allowed to establish their own budgets for applications and process work, because they know better than corporate executives what their business-unit needs are, said John Lieblang, owner of Measured Value business consulting in Detroit and a former chief investment officer.

Cloud solutions are usually easy to exit and interchangeable. A company can thus change providers quickly and easily without the exit costs associated with more traditional in-house software and hardware investments, Rodrigues said. “You don’t have to worry so much about the long term, because if something doesn’t work, you can always change it,” he said.

“The IT department is changing, or should be changing, its perspective and focusing less on the technology decision-making, Rodrigues said.


This is the third of four articles that explore the outlook for technology spending — and why corporate tech budgets are bound to rise. The other three are IT Outlays Are Poised for Takeoff, which looks at what’s driving the burgeoning budgetsCFOs Holding CIOS’ Feet to the Fire, which looks at how finance chiefs asking top tech execs to justify spending; and Effective Tech Spending: a CFO’s View, in which a finance chief tells why her peers need to know a whole lot more about IT.


Leave a Reply

Your email address will not be published. Required fields are marked *