IT Budgeting Practices that Deliver
IT budgets often seem to be preallocated and mostly aimed at regular operations only, according to Deloitte’s Global CIO survey. This poses an issue, as such allocation doesn’t leave much room for tech innovation. What little remains of the budget usually goes towards incremental changes.
Yet, there are positive movements that show IT spending will increase if there are revenue opportunities, security concerns, or good business conditions, as reported TechRepublic’s IT Budget Research Report. Per the report, the top priorities include security, cloud computing, and employee training.
So how can you get the board to approve the IT budget you need? Start by following these best practices:
1. Keep track of your spending
When you’re making your new annual IT budget, IT spending from previous years will help you determine where you had enough, had too much, and where funds were missing. Armed with data from previous years, you’ll be able to reallocate funds instead of just trying to get a budget increase.
Showing the board that you are focusing on efficiency and doing what you can with the budget will help you get more of your plans approved.
2. Show stakeholders that IT is more than utility
It’s not the board or decision-maker’s job to understand everything there is to know about IT and cybersecurity. They may have heard about the latest networking equipment or enquire about the cloud but not know how these technologies benefit the company.
You need to show innovation and be the first to start the conversation about new technologies to show that IT isn’t just draining money. It’s your job to show IT’s value using your proposal.
3. Show them risks and threats
Keep up to date on the current threats and risks that the company faces. This might be cybersecurity risks because you’re not using new security solutions, or because your employees lack training in how to identify possible email phishing scams.
Keeping track of the threats to the business properly with firm reasoning and justification will help decision-makers understand why you need more funds.
4. Calculate the financial impact of skipping on new technology
Just telling them there’s inherent risk of a security breach is not enough though. The best way to communicate risk is showing them the actual financial impact numbers.
For example, you can show them how much it will cost to stick to the current technology stack. Then, make a comparison of using new technology – like cloud solutions – and how much less it would cost over time.
This way, even when implementation costs are high, you have the numbers to back up your claim of long-term savings.
5. Use Numbers AND visuals
While spreadsheets are the most common way to keep track of IT budgets, they aren’t the best option when presenting budgets to the board because they are time-consuming and hard to interpret in a meeting.
Instead, turn the numbers into visuals so they can see at a glance what you’re talking about. It makes you more impactful and they’ll appreciate not having to try and figure it out from a spreadsheet.
When looking at best IT budgeting practices, it’s important to remember that IT should always align with company goals, and there’s no better way to communicate this than by ensuring your IT budgeting is efficient, saves money in the long run, and easily shows the board where the focus of IT spending should go to.
TheBoardishTeam
