Between April and June every year, I talk to many organisation and department heads who mention the dreaded “B” word – Budgets. There are many reasons as to why people hate doing budgets, but I’ll skip that and tell you how you can make the most out of the budgeting exercise from an Information Technology (IT) management perspective.
There are many aspects of an organisation that are factored into a budget and one area that usually suffers due to lack of vision and forward thinking is Information Technology. Quite often IT Managers (along with many others) use the simple process of adding a percentage to the current year’s budget and submit it to the Accountants. Job done and the pain goes away for another year.
That is of course until something happens to that 10 year old server that’s been running trouble free, which runs an application that only one person can support but no one has the source code for, suddenly dies. By the time this problem is rectified, it could potentially have taken a huge chunk of money out of your budget that the IT Department cannot invest in any new technology for the rest of the year, until more is allocated in the next budget. Guess what happens the following year? Another unplanned expenese and the story repeats itself…
Problems similar to this can be avoided by putting in some extra effort upfront or during budgeting time, to review not only your existing systems, applications and infrastructure but also your projects (current and planned) and your people.
For example, you should review the current infrastructure to see how it’s performing and what loads it can handle. Does performance degrade when the severs are loaded beyond a certain point? Can they sustain this load over the next year or two? Will any current or new projects have an impact on the current infrastructure? Are the current infrastructure still supported by the vendor? Similar reviews can be performed on core applications and databases. This helps you understand what you have at present.
Another angle to explore is the organisation’s goals for the next few years. If the plan is to double the volume of sales, shipments, or customer base, within the next 3 years (this is a very common scenario by the way), are the current systems capable of handing this volume of transactions? Furthermore, do you know what the forecast volume of transactions are or is it just a guess? This helps you understand what the business may need going forward.
Also, consider if the introduction of new systems will help the organisation achieve it’s goals faster than trying to make an old system work with heaps of limitations? If the business is heading in a new direction, it is also useful to start looking into how IT can facilitate this process rather than wait until someone knocks on the door and wants something in place tomorrow. This helps you stand out and be seen as a strategic player instead of a support function.
By performing a comprehensive review incorporating the elements described above, it will:
- Ensure that your key IT Systems don’t miss out on budget allocations;
- Help to justify any IT spending in the new financial year as it’s already been budgeted (or planned) for, along with a suitable business case; and
- Most importantly, ensure that your IT Systems don’t HOLD BACK your business from growth opportunities!
A common, but often undocumented, benefit of this exercise is COST SAVINGS through better understanding and utilisation of the current Information Technology Systems.
There is of course no guarantee that asking for extra money in your next budget will mean you will get it, but atleast you will have a compelling argument to get some extra funding should something go belly-up during the year. What have you got to lose?
Photo by stock.xchng user Leonardini.