Build an IT Budget

Effective IT budgets are more than a spreadsheet. They tell a story.

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Not building a budget that communicates value delivery can result in:

  • IT viewed as a cost center due to lack of transparency.
  • Changes in operations and environment.
  • Significant deviations between actual and budgeted costs.
  • IT budgets facing downward pressure: remaining flat or decreasing.

IT budgeting will help you:

  • Forecast for next year’s budget.
  • Implement cost improvement to optimize IT spend.
  • Compare key cost accounts to industry benchmarks.
  • Increase transparency and support from the business.

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Onsite Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn’t enough, we offer low-cost onsite delivery of our Project Workshops. We take you through every phase of your project and ensure that you have a road map in place to complete your project successfully.

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Module 1: Plan

The Purpose

  • Definition of IT budgeting.
  • Recognition of the benefits of better budgeting.
  • Understanding the risks of budgeting.
  • Understanding the challenges of budgeting.
  • Preparing for IT budgeting.
  • Getting the right people in the room.
  • Understanding budget mechanics.
  • Establishing a clear budget target.

Key Benefits Achieved

  • Understand how better budgeting can help your IT department.
  • Understand the risks of poor budgeting.
  • Identify budgeting challenges.
  • Understand what business units are planning to do.
  • Successfully pre-sell ideas and get support for IT initiatives.
  • Assemble a budgeting team and make sure resources are available for consult.
  • Determine your budgeting target.
  • Understand budgeting process.

Activities: Outputs:
1.1 Discuss how IT budgeting works for your organization.
  • Identified budgeting pain points experienced by your IT department.
1.2 Brainstorm budgeting goals and understand what your IT department would do with a limitless budget.
  • Identified budgeting pain points experienced by your IT department.
1.3 Identify organizational goals and discuss impacts on IT budget.
  • A list of all goals that the IT budget would meet with a limitless budget.
1.4 Prioritize meeting the goals of finance and other business units.
  • A prioritized list of key goals that the IT budget must meet.

Module 2: Build

The Purpose

  • Forecast capital costs.
  • Understand best practices for capital budgeting.
  • Forecast operating costs.
  • Understand best practices for operating budgeting.

Key Benefits Achieved

  • Accurate budgets for the capital costs of innovation, maintenance, and business projects.
  • An understanding of best practices for capital budgeting.

Activities: Outputs:
2.1 Identify key projects.
  • A list of all projects that may launch this fiscal year.
2.2 Forecast capital costs.
  • Accurate capital cost forecasts that are classified into various categories.
2.3 Forecast operating costs.
  • Accurate operating cost forecasts that account for inflation, changing labor costs, changing vendor prices, and changing service levels.

Module 3: Sell

The Purpose

  • Ensure budget includes required information.
  • Validate and fix anomalies.
  • Share your budget internally.
  • Construct a budget presentation.
  • Sell your financial budget.
  • Build your budgeting people, process, and technology capabilities.

Key Benefits Achieved

  • Ensure all required information is included.
  • Identify and fix errors.
  • Adjust assumptions to yield greater accuracy.
  • Build a compelling budget presentation.
  • Build a revised budget presentation.
  • Practice the presentation to improve delivery.
  • Find additional cost savings opportunities to suggest in the event of revision.
  • Build budgeting capabilities through improving human capital, processes, and IT financial management technology.

Activities: Outputs:
3.1 Play devil’s advocate: take turns critiquing the budget.
  • A completed financial budget with accurate and defensible operating and capital cost projections.
3.2 Adjust the budget to tighten assumptions and correct errors.
  • A completed financial budget with accurate and defensible operating and capital cost projections.
3.3 Build the budget presentation.
  • A completed budget slide show that is compelling and concise.
3.4 Mock presentations: practice the budget presentation.
  • A well-rehearsed and compelling budget presentation.
3.5 Identify budgeting activities your IT department needs to stop doing, continue doing, and start doing.
  • A list of budgeting activities that your IT department needs to start doing, stop doing, and continue doing.
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