Build an IT Budget

Effective IT budgets are more than a spreadsheet. They tell a story.
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Major Business Pain Points

  • IT cost pressure is fueled by negative sentiment; IT can be perceived as a high cost that does not deliver value.
  • Budgetary approval is difficult because finance executives have a limited understanding of IT and use a different vocabulary.
  • Detailed budgets must be constructed in a way that is transparent, but too much detail results in complexity that is confusing.

Recommendations

Key Points

An effective IT budget tells the story of how IT is going to deliver value to the business.

  • Make the business your partner to understand their future needs.
  • Know how much money you’ll need and the value you’re going to deliver.
  • Communication matters; present clearly and credibly.
  • Help the organization make the right decisions by explaining the implications of its choices.

Approach

  • Knowing the initiatives business units will propose allows you to get a head start on forecasting IT costs.
  • Presell ideas. Quick face-to-face chats about how a new initiative could benefit the organization can go a long way.
  • Do not pad key innovation project budgets; building the case for approval is difficult enough as is.
  • Forecasting operating costs requires an accurate view of historical costs and an understanding of how business changes will affect IT costs.
  • Anticipate the questions that will be asked; discretionary projects are often criticized and challenged. Think about areas that people will focus on, do research, and be ready to respond intelligently.
  • An IT department can’t squeeze dollars out of rocks. Tie cost reductions to service reductions and deferred projects.
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Methodology and Tools

Executive Brief

Read our concise Executive Brief to find out how to build a budget that demonstrates value delivery.

  • Build an IT Budget – Executive Brief
  • Build an IT Budget – Phases 1-3

1. Plan

Plan for success.

  • Build an IT Budget That Demonstrates Value Delivery – Phase 1: Plan
  • IT Budget Interview Guide

2. Build

Build the budget.

  • Build an IT Budget That Demonstrates Value Delivery – Phase 2: Build
  • IT Cost Forecasting Tool

3. Sell

Sell the budget.

  • Build an IT Budget That Demonstrates Value Delivery – Phase 3: Sell
  • IT Budget Presentation

All resources on this page are provided to Cyber Leadership Hub members under license from third parties including Info-Tech Research Group Inc, a global leader in providing IT research and advice.