Strategic CIO

How Your Digital Budget Can Drive Your Business Success

Creating a budget is critical for businesses, especially in this digital era. It is important to allocate resources and invest in technology that can improve operations and productivity. A digital budget focuses on technology and software that can drive growth, enhance customer experiences, and streamline internal processes. By investing in the right digital tools, businesses can stay competitive, reduce costs, and increase revenue. Matt Ashare’s BankingDive article highlights the significance of a digital budget in managing finances effectively.

Investing in a Digital Budget for a Competitive Edge

JPMorgan Chase’s 2022 IT budget, which stands at $14 billion, includes expenses on hybrid cloud infrastructure, digital products and services, predictive analytics, data security, software development, and around 6,000 apps. Lori Beer, the bank’s global CIO, highlights that the bank is large and requires significant investments to support the various technology-driven products and services it offers. As companies brace for the impact of inflation, economic downturns, and geopolitical instability, global tech spending is predicted to exceed $4.8 trillion this year. Approximately 25% of businesses are expecting their tech budget to increase by more than 5% over the next year.

Beer stresses the importance of framing IT investments in business terms. She also emphasizes the business value of modernization initiatives to win the C-suite’s buy-in for her budget. To achieve this connection between business and IT, Beer follows a three-pronged strategy. First, she showcases how technology is a core part of the business strategy investment. Next, she highlights short-term investments that foster credibility. She then goes on to articulate the value of secondary technology investments that require some spending to maintain innovation.

Strategizing Your Digital Budget for Success

Of the $14 billion budget, $6 billion is allocated to new digital products and services. That supports growth, innovation, and the technology required to operate daily business activities. Another $4 billion aligns with the bank’s four key business lines. Namely retail banking under the Chase brand, investment banking, commercial banking, and asset wealth management. The rest of the budget supports infrastructure modernization and the digital transformation of business processes across many aspects of the bank. This includes infrastructure, software development, and data science model development.

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