Shane on Information Technology...IT Budget Planning: No Surprises!
The first thing that you need to do is get a handle on your assets. There are many different software packages that can help you with this task. Some are capable of automatically inventorying your network's software and hardware assets. If you have more than 10 or 15 personal computers on your network, this software can quickly pay for itself in time saved.
Once you have an accurate picture of your assets, you should segment them into budget categories. The budget categories can be anything that makes sense for you or your organization. I use categories like Network Hardware/Servers, PC Upgrades/Repairs, Training, Software and so forth, which represent the major “blocks” of IT expense for Haws. That way it's easier for us to track and compare categories.
The next step is to work on baseline budget items. These are annually recurring expense items. As a minimum, these will include expenses such as hardware and software support, as well as other miscellaneous (not immediately assigned) categories.
Next, you should take a good look at your current assets. As it relates to software, I take a look at the different packages that we use and look into the upgrades that are available. I usually don't opt to buy an upgrade to a software package until it has been out long enough to get the bugs worked out. This strategy works well for me, because I don't have to budget for a product that isn't available yet. That way, I can avoid guessing and playing hunches!
As it relates to hardware, I use an overall performance metric to develop a minimum acceptable standard for the upcoming year. For instance, with PCs, I consider processor speed to determine which PCs will need to be replaced in the upcoming year. I utilize processor speed as a benchmark, because most everything else in a PC can be replaced or upgraded for a reasonable cost.
The last and most time-consuming step is to plan for the strategic projects you want to implement in the upcoming year. This is difficult because it does require that you “look into the crystal ball” a little. The object here is to create a strategy that will move your entire IT structure into the future, before the future has been clearly established. Challenging to say the least, but possible if you do your homework!
A number of asset tracking software packages also address budget planning. This is an important feature, because it gives you the opportunity to monitor your budget year-round. Knowing where you are with your IT budget at any given time can help you to make informed decisions. And that's the name of the game in IT planning.
Best PracticesHere are this month's Best Practices:
21. Create an IT budget for both tactical and strategic projects.
There are three budgetary considerations that must be comprehended in your annual resource planning: (1) Your business will - hopefully - continue to grow, placing greater demands on your IT infrastructure. (2) Your present IT infrastructure will naturally deteriorate with constant use throughout the year, and (3) The state-of-the-art, with respect to hardware and software capabilities, will continue to advance, requiring continued investment to stay competitive. All three elements are undeniable and must be planned for in the budgeting process.
22. Establish the use of IT resource inventory and tracking software.
As mentioned, software packages are available that will speed the process of inventorying and tracking your software and hardware assets. Once this is accomplished, the process of planning for upgrades, maintenance and replacements is dramatically easier. And, current asset management software generally also provides excellent facilities for direct budget planning and management.