IT budget planning can be a huge headache for both large and small corporations. It can feel like it’s a never-ending process, in operation twelve months of the year. The goal is to make sure that everyone is on the same page; transparency is important as well as flexibility.
For CIO’s and CFO’s of IT, one of the more time-consuming actions is managing data collection and consolidation of spreadsheets. Because of this, there’s not enough time spent on reviewing, planning, and forecasting. This makes it difficult to achieve financial targets and organizational goals.
Another challenge lies in how corporate finance thinks in terms of general ledger accounts while IT doesn’t have these. This causes a translation issue for IT budget owners as they try to translate between the two different categorization methods.
IT Budget Process Owners must also reconcile the fact that their planning process begins months in advance to allow for data preparation and spreadsheet manipulation. And even though corporations utilize powerful software, there are still many modifications and/or specifications that must be made to allow for the dynamic nature of IT budgeting. In other words, this software has to be highly customizable.
To help deal with this, some IT professionals build out spreadsheet-based subsystems, email communication patches, and other homegrown approaches. However, they come with a cost; they are time-consuming and add another layer of complexity. On top of this, it is often necessary to reconfigure IT systems (both as needed and on-the-fly) to address specific corporate and line-of-business objectives.
MORE TIPS IN: A GUIDE TO IT BUDGETING
It’s so important to remain laser-focused on the bottom line! We’ve vetted the most valuable budgeting strategies with IT managers. Here are the results:
4 ways to improve IT budget planning:
- Align technology decisions to the mission of the company. Work more closely with budget owners and get to really understand the priorities of each business day. Where do you find the bandwidth for this type of granular communication? If you’re not relying entirely on consolidating spreadsheets, but instead are actually talking to people, you are better able to analyze future spend against strategic objectives.
- Budget owners have to drive accountability. Although IT and finance often speak different languages, in giving budget owners more control you can foster more transparency, instilling accountability. This type of cross-functional collaboration means that everyone is on the same page; finance knows where the money is being spent because they helped build the budget.
- Provide frequent reports. Nobody likes surprises. This will ensure that CEO’s, CFO’s and CIO’s can quickly recognize overspend, underspend, and opportunities for adjustment. Thus they can better understand variance and budget drivers. This creates a strong foundation for starting or refining an ongoing forecast cycle.
- Work with vendors and partners you can trust. At Summit, we can help you plan for emergencies and unexpected costs, as well as offer you more tips for getting your budgets approved. Our asset recovery services can even add a little padding to your budget by turning unused equipment into cash.
IT budgeting can seem like a daunting task. However, breaking it down into manageable chunks, getting buy-in from other departments, creating well-organized reports, and pulling your vendors into the process will help your budgeting be successful and support the business’s overall goals.
