Follow the Money Patterns

Patterns / 4. Reframing the Conversation

Pattern 4.6

Baseline Before You Claim

Before you claim a saving, agree with finance which cost line it will appear on, what the baseline is, and when it will show up.

Baseline Before You Claim
Baseline Before You Claim

In This Context

If you promise savings to get funding, someone will eventually ask where they went. It is much easier to forecast a saving than to evidence one. A saving that can’t be evidenced is treated with skepticism, and so is the next proposal from the same team. Finance also measures in specific ways: a request to question every cost line that grew last year tests growth line by line, not total cost, so a case that only moves cost between lines fails the test.

You can see this pattern is needed when your case says “reduces IT costs” without naming a line, a starting figure, or a date.

  • Without a baseline, any saving can be disputed, and probably will be.
  • Licenses renew on fixed dates, and contracts have notice periods.
  • Finance teams do not like surprises.

Therefore

Agree three things with someone in finance before claiming anything, and write them into a plan that will outlive its sponsor.

  • Which cost line: these licenses, this contract, that hosting bill, not “IT costs.”
  • What the baseline is: what the line costs today, and what it would have cost next year if nothing changed.
  • When the saving will show up: renewal dates and notice periods included.
  • Check that no other line grows by the same amount.

Consequently

  • The saving survives being checked, a year later, by someone who wasn’t in the room.
  • Your team’s next proposal is believed.
  • The case looks smaller, because only evidenced savings count.
  • A saving that lands later than promised is still a surprise to finance.

Seen In

Chapter 16, “Make the Numbers Survive Being Checked” (Chapter 16, “Make the Numbers Survive Being Checked”); the Technology Modernization Fund there.