Easing the IT Budget Process

By Peter Coffee  |  Posted 2002-09-23 Print this article Print

Managers need to tap tools of the trade to win top-level support for technology spending priorities.

Like the cobblers children who go without shoes, an IT department may be fully engaged in equipping enterprise profit centers with the latest management tools and yet find itself without effective budgeting aids or processes. eWeek Labs, therefore, offers the following perspectives on how to get those priorities supported with funds and with non-IT management commitments.

An IT budget is not merely a shopping list, but rather represents an entire sheaf of policy statements. It asks, and answers, such questions as:

  • Who are the users of enterprise information assets, and how will we make those assets accessible to them?

  • What is our current portfolio of IT assets, and how are we assessing the returns on the capital thus employed and the cash flows thus committed?

  • How do we acquire the assets needed to support new IT initiatives, and are we doing so in ways that minimize present-value cost and technical risk?

  • What are the effective "lines of business" within the IT function, and are we in those lines of business out of habit or because theyre actually the best way to meet enterprise needs?

  • Does the IT budget accurately reflect the costs of assuring privacy of data, security of systems and continuity of operations?

  • Are other enterprise functions well-served by IT in obtaining the information that they need to achieve their goals?

    The breadth and depth of IT budgeting systems must grow to meet this increasingly complex charter of more difficult decisions. But IT staff, with above-average confidence in its ability to use such stick-shift tools as spreadsheets and e-mail, may not recognize the handicap they impose on themselves by failing to capture data and manage their budget workflow with automated (or at least well-streamlined) aids. Challenged to show quick paths to compelling returns on new investment, IT needs the leverage of modern budgeting technologies—including the standards-based, Web-oriented facilities they are probably promoting to others.

    Even experienced IT managers may never have encountered the skeptical, even hostile climate that their spending proposals may have to face for perhaps another year or more.

    Entering the 00s, its been a shock to both sellers and buyers to deal with a new paradigm of IT budgeting against a base line of near saturation. Almost every apparent IT need has been met—in many cases by a second- or even third-generation solution—and general management has developed a critical eye thats quick to focus on anything that looks like upgrading out of habit, without a demonstrable business benefit.

    Peter Coffee is Director of Platform Research at salesforce.com, where he serves as a liaison with the developer community to define the opportunity and clarify developers' technical requirements on the company's evolving Apex Platform. Peter previously spent 18 years with eWEEK (formerly PC Week), the national news magazine of enterprise technology practice, where he reviewed software development tools and methods and wrote regular columns on emerging technologies and professional community issues.Before he began writing full-time in 1989, Peter spent eleven years in technical and management positions at Exxon and The Aerospace Corporation, including management of the latter company's first desktop computing planning team and applied research in applications of artificial intelligence techniques. He holds an engineering degree from MIT and an MBA from Pepperdine University, he has held teaching appointments in computer science, business analytics and information systems management at Pepperdine, UCLA, and Chapman College.

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