The CIOs at the Midsize Enterprise Summit aren't shy about the things they dislike about solution providers.

Their patience for cold calls is nil. They're tired of the same old fast-paced, scripted sales pitch that seems to always be long on catchphrases and weak on knowledge of the customer's actual business. I've heard this again and again here in Dallas.

For solution providers, that problem is about to be compounded. CIOs are beginning to embrace a budgeting system that stresses in-depth knowledge of how, where and why every dollar is spent, as well as increased collaboration and cooperation with CEOs and CFOs.

The plan was highlighted at MES Monday by Gartner analyst Michael Smith, and I think it serves as a warning to solution providers to up their sales game, to arm themselves with better product knowledge, a better understanding of customers' business, and a firm understanding of the cost pressures facing IT chiefs across industries.

The challenge for solutions providers' sales forces comes along with an improvement in the relationship between CIOs and company CEOs and CFOs. The groups are starting to move away from the traditional approach to the IT department financial planning and toward what Smith calls a "services view of the budget."

Here's why.

Smith cited research indicating that chief executives think 20 percent of IT budgets are just wasted money. They think that budget can be slashed with no ill effects on the business, and they're more than happy to assign the CIO to do the cutting.

As a result, many companies are at risk of chronically underfunding IT operating expenses.

Chief executives are only beginning to realize the impact IT has on any midsize organization. According to U.S. Bureau of Labor Statistics data used by Smith, as much as 70 percent of a company's productivity growth comes through IT. Thirty percent of profits come from IT economies of scale.

"How long can your company go without realizing average productivity growth before you become non-productive?" Smith asked. "When we underfund IT, we start to erode the productivity benefit."

To turn the page on that way of thinking, Gartner encourages CIOs to break out each of the services their departments provide their businesses – workplace management, automated financials, billing, etc. – and show how much time, money and manpower must be allocated to carry out those services.

When asked to explain it, CIOs have to move away from bludgeoning chief executives and financial chiefs with the "how" of the IT operation and toward simply explaining what they're going to do.

"This leads to a discussion so they can begin to understand where the money is going. You can offer them choices… They understand the connection between the funding and the business mission. You're demystifying the budget."
What the business ends up with is a plan for the right level of funding, explained simply in cost-per-user, per-month, and carefully tuned for efficiency and impact.

This, intrepid solution provider, leaves precious little wiggle room for you to probe with your potential customers. Gartner says this is how businesses will optimize IT spending. Solution providers are going to have to optimize right along with them.