How Finance Can Fine-Tune IT Spending (Spend Matters)

A list of issues CFOs should be raising with IT.

When it comes to IT cost management, what was once the sole responsibility of the chief information officer has evolved into a more collaborative function involving the CEO, the CFO and the leaders of business units, according to NPI, a spend management consultancy, has put together a list of questions and tips CFOs should be discussing with their chief information officers in 2013.

Start with spending. Since there aren’t public list prices for many IT services, benchmark technology spending. Make sure vendor pricing and terms are transparent and fair.

Ask if the company is too locked in with current vendors. Keep the pressure on incumbent vendors to ensure the company receives optimal treatment.

Is the company paying for fixed-fee engagements? Buy professional services on a time-and-materials basis to control excess cost.

Does the company have an IT controller? IT purchasing can be complex and requires a level of expertise the average IT manager may be lacking. Many companies have now established a vendor management office or IT controller role to optimize technology purchases.

Finally, maintain internal alignment to avoid hemorrhaging money. Making sure that IT is familiar with departments’ needs and can predict costs will ensure better investment choices.

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