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As finance is featured in every part of the organisation, managing IT costs has become a key trait for a CIO to develop to help keep a business running.

Whether it's preparing a budget, analysing reports or overseeing financial forecasts, CIOs should possess the basic skills they need to help ensure they make financial decisions in the business. CIO UK looks at how today’s digital leaders can keep abreast of IT costs to help give the business a competitive edge. (See also: 6 Tips on managing IT outsourcing.) 

Align with finance departments

Financial departments make decisions which affect the company's performance and growth.

CIOs sometimes lack these skills, but through collaborating with financial departments they can gain further knowledge and insight into their roles.

2017 CIO 100 organisations including B&H Worldwide, 2 Sisters Food Group and North of England P&I have seen their digital leaders work alongside their financial departments to help monitor costs and deliver business growth.

In some organisations, effective financial programmes are in place such as workshops, mentoring and peer observations, that help CIOs to understand the financial implications of decisions made in the organisation. As a result, it can help digital leaders to grasp financial jargon, spread IT costs further and have better control over their finances.

Collaborating with finance teams can allow CIOs to not only deal with the business costs but also to help manage their personal finances better.

Make a budget

A budget can help take control of your finances and is a great way to see profit and loss in the company.

While taking the time to analyse business costs is necessary for any organisation, it can also be a great way to influence the board and to make IT investments.

According to the Harvey Nash survey, 45% of IT budgets are increasing. CIOs should create a budget which outlines costs, materials and resources in order to monitor the financial performance of the organisation. Keeping a record of costs will help ensure business executives are fully informed on IT projects and uncover any financial concerns.

Budgets should be tied to current projects, objectives and action plans for the IT department while also aligning with the business strategy.

Have a set plan

In order to monitor IT costs CIOs need to have a set plan. Reviewing existing reports can help digital leaders to formalise costs and spending in the organisation.

The financial research should contain figures, information and statistics to see what the organisation has achieved. This can provide great insight for CIOs who are want to create their IT budget and gain a better understanding of finance.

Reviewing business reports can outline what needs to be done to develop an effective IT strategy. Checking through bank statements, receipts and expenses is a great way to monitor expenditure while also breaking down how much is spent in each department.

Meeting with financial advisors, industry peers and network groups can help develop a better understanding of IT costs and spark ideas while developing a cost strategy.

Detailing a financial plan can help motivate team members to work towards a shared business goal while also adding credibility to a CIO's role. What's more, it can help CIOs to know exactly where the money has gone, make wiser investments and take account of IT expenditures.

Training and workshops

A reason why the role of a CIO is challenging is having a background in finance is infrequent today.

In some organisations, encouraging training and attending skills workshops can help ensure the relevant skill sets are developed for its employees.

The use of development programmes can highlight basic financial terms such as cash flow, assets and expenses which can help manage a business more effectively. This can help ensure the business is ahead of its competitors and improve the understanding of financial risks.

Good financial management can help prepare CIOs to manage relationships with stakeholders, suppliers and investors for long-term financial stability.

Use finance apps & technology

An effective way to increase a CIO's financial skills is through using digital tools and mobile apps.

The use of management tools such as QuickBooks, Interact and Xero can help create budget plans and financial reports and give statistical overviews. These tools offer guided tutorials to help manage business costs, record invoices and track transactions.

As technology becomes more focused on enhancing the business and its customers, Chief Digital and Information Officer Mayank Prakash is launching a new digital service to help manage its users' finances at the Department for Work and Pensions.

"The service will help people understand their retirement income, trace old workplace pensions, apply for budgeting loans, and apply for financial support to help disabled people enjoy full access to work," he said.

Prakash describes how DWP's digital function and social purpose is the motivation driving everything they do which enable them to be more tailored to its customer’s needs.

The public sector organisation is ensuring digital technology gives customers greater control over their lives, through researching the potential of blockchain to ensure better financial management.

"Blockchain has the potential to revolutionise the exchange of data between departments and for all financial transactions through simple, high-performing and secure methods."

Financial management should be a skill every CIO possesses in their role. It can not only help them manage IT costs and help add credibility to their role but also keep a business running. (Read next: How to reduce IT costs