3 Best Practices for IT Budgeting
Learn the Secrets of Successful Budgeting in our Free Webinar
Does this sound familiar? Two of your business-critical servers are 5 years old and need to be replaced. At the company budgeting meeting you say, “Hey we’ve got to replace these servers.” The CFO replies, “Well can we get another year out of them?” Reluctantly you reply, “Yeah … we can. It’s just risky.”
But what the boss wants, the boss gets. So you don’t buy new equipment and instead work your tail off to keep those servers alive for another year. Because if you don’t, you’ll be in trouble.
The problem with IT budgeting these days is that IT people have all of the responsibility and none of the authority. Building a good IT budget and actually getting it approved can seem like a Herculean hurdle.
This year, try these three techniques to boost your chances of walking away from the budget meeting with the budget you need. They’re just a taste of what you’ll learn at our webinar: The Keys to IT Budgeting Success.
Identify What “Good IT” Means for Your Company
“Good IT” is what IT should look like and act like to give the business everything it needs to operate efficiently and effectively. If you don’t know what Good IT is for your company, how will you know what your goal should be? How will you know when you’ve achieved it?
The first and most important thing you should do in the IT budgeting process is get consensus on what Good IT is for your organization. Then you can build a budget that will get you there.
Defining Good IT and the budget to do it with gives the IT department a structure for success. No business unit operates without constraints, because constraints are part of business. Yet IT is often working without constraints because they aren’t given a clear budget – or they don’t have any control when it changes.
No clear budget means the IT department can’t show good work by being creative and coming in under budget. Just like for any other business unit, a budget is a form of success criteria for IT.
Talk in Business Terms, Not IT Terms
If your friend only speaks Spanish, talking to them in English won’t work. Yet that’s how IT people approach budgeting meetings. They talk to high-level business people in IT speak, not in terms business leaders can understand. As soon as an IT person starts getting technical, they lose the attention of the decision-makers.
The people in charge of approving your budget want to know:
- Do we need it?
- Is there a cheaper option?
- What happens if we don’t replace it?
Put every request in your budget into money and business terms. Show the business value of every line item.
Explain “The Other Side of No”
Just because you get told no to a budget request doesn’t mean you have to immediately turn around and walk away. Instead, spend a few moments explaining the downsides to saying no. This is what is called “the other side of no.”
Sure, saying no means the business will be spending less money on this particular item, but what’s the other side? What are the risks of saying no to this? Make it very clear what could happen if no is the final answer.
The other side of no puts the risks and responsibilities of saying no back onto the decision-makers. When that happens, they tend to think more carefully about it – and may even change their no to a yes.
Beat the Budget Blues
Having success criteria for IT, putting everything into business terms, and explaining the other side of no are just the tip of the iceberg for IT budgeting success.
For even more tools and techniques, watch our webinar: The Keys to IT Budgeting Success. This panel discussion shares real-life examples and strategies for mapping IT strategy to a feasible budget – one that will actually get approved by the CFO.
You’ll leave with:
- Templates & timelines for your IT budget
- Strategic methodologies for planning projects and upgrade cycles
- Roadmaps for identifying your benchmarks of IT success and how to get there
- Our downloadable IT budgeting resource pack
Meet the panelists:
IT ROI: 10 Tips for Selling (and Proving) the Value of IT – CIO Magazine