Insurance CIOs take pride in how much control they have over their IT budget, as well as the work they put into managing it. A recent survey conducted by The Corporate Executive Board Company found that CIOs assume they have control over 80 percent of their IT budget.
Unfortunately, Forbes magazine reported that they only really have 60 percent.
This is because people from different departments want to have a say in how the IT budget is used. Everyone from the head of Human Resources to the CEO feels a need to manage the money and make sure that it’s being spent wisely. In turn, this takes away from the control that the CIO has over the budget.
A need for best practices
As more insurance CIOs realize that they don’t have as much control over their budgets as they thought, it’s becoming imperative to establish a set of ground rules. While a CEO might think that he or she knows how to use the IT money effectively, a CIO likely has a better idea of where the cash should be going.
That being said, a few simple best practices can ensure that the budget is always being used properly.
It’s critical for CIOs to closely monitor how others spend – and specifically where their money goes. For example, many people become caught up in the idea of spending cash on new technology that isn’t necessary, especially when existing devices and software are up to par.
Similarly, CIOs can benefit from doing their homework on risk factors pertaining to budget spending. Having numbers that help individuals understand the risks involved with purchasing new technology can prevent spending from being blown out of proportion.
While there’s only so much that can be done about the control that insurance CIOs have over their IT budget, these tips can help create an understanding between different departments. As new technology becomes available to more people, educating employees on smart spending needs to become a business standard.