How Do You Prepare Your First IT Budget?
The main aim of preparing that first IT budget is presenting an IT strategy proposal with a determined value.
The board can agree or disagree on the value you placed on the proposal, so it’s your job is to prepare the IT budget that the board will agree with. If you’ve never done this before, here are a few pointers on preparing your first IT budget.
1. You need to ask the right questions
Your first IT budget should give you a chance to demonstrate how you can improve things for the company.
Take a look at how IT has been running until now, and then answer the following:
- Can you lower costs?
- How can you increase efficiency?
- Can you lower risk?
- How can you increase security?
- In what order would you execute your IT plans?
- What is the most important priority?
- How will your IT strategy over the next 12 months keep the business healthy, secure, and thriving?
To get the board on your side, you will have to align your plans with theirs.
2. You need access to the right data
Data is your most valuable asset. If you’re new to this position, acquire data from previous years and see what your predecessor has been spending on the most.
You might see how you would make things different immediately.
If there are no previous budgets to look at and you’re in charge of making the first IT budget ever, then industry research on technology spending and budget allocation will provide a good measure of how you should set things up.
3. Always involve others
You might be in charge of making your first IT budget, but you are not the only one in the IT department.
Collaborate with other IT professionals and have quick meetings where you can gather their input on the most pressing matters.
Invite them to articulate their needs and why they think their issue should be addressed first. You might find that you need more staff, replace end-of-cycle gear, or improve your cybersecurity with a cyber risk employee training.
4. Present actual numbers
A budget that just demands is a budget set to fail. The strongest argument is one that’s backed up by actual numbers.
When preparing your first IT budget, don’t just list how much money you need for each of your operational, ongoing, and capital costs.
Think in terms of return on investment (ROI). When the board sees growth in revenue, or savings, or more efficient operations, you will find a common ground much faster.
Don’t forget to quantify the IT and cyber risks and solutions to the decision-makers that the company could be facing. Doing this in financial impact is a language they will understand best (that’s where you should use Boardish!)
5. Lead the board through possible scenarios
The number one reason why IT budgets are not approved is because the board doesn’t understand the inherent risk the company might be in. Not just cybersecurity risk, but business risks including a lack of mobility, unscalability etc.
You can solve this by presenting several possible scenarios right then and there. The board members can see for themselves how much more it costs to keep outdated technology, bad security practices, or allow BYOD without any real policies for example. And this makes for faster, and more reactive decision making.
Making the first IT budget requires some good research and analytical skills – get the needed data and analyse it. You don’t have to do everything alone. There’s plenty of tools that will assist you and help you get approval.
Want to get your budget approved? Here’s how:
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