Got your IT budget for 2011? Or is your budget still in process as your company evaluates its business objectives? Although the economy is slowly improving, many IT organizations are grappling with developing budgets that eke the best value out of every last dollar. IT pros need to mitigate system degradations that likely occurred during the last two years of budget pullbacks, ensure that business processes run smoothly, anticipate company strategy shifts that will require different systems, and keep costs down. All in a day’s work, right?
Building a budget that’s a win for company leaders and the IT organization starts with a firm understanding of business drivers and the technology. Jeff James discusses the business side of building the technology budget in his Business Perspectives column. To get some input on the IT budget process, we talked with a few members of the team at eTek Global, a consulting company based in Overland Park, Kansas, that works with small and medium-sized businesses. Ameet Phadnis, a partner and principal consultant for eTek Global, noted that most of their clients’ technology investments in 2011 will focus on business process automation and business intelligence systems. Cindi Reding, vice president of business development, added that implementing SharePoint is a primary focus for many companies because it can put business data in the hands of the information workers, freeing up the IT staff for other projects. Phadnis and Reding, along with Leonard Mwangi, also a partner and consultant, offered useful observations about how IT pros can drive a successful budget process.
Understand the business. The need to understand your company’s business is a theme that just won’t die, but it’s a concept that many IT pros still haven’t mastered, according to Reding. “You have to know the business, you have to understand the business processes, and you have to be able to talk to the business leaders on a business level and not a technical level.” Reding says that until IT teams include business-oriented technologists, “we’re never going to get past this mindset where IT is seen just as a cost center. You need to have a group of people who can actually show a benefit rather than just a bunch of tools that are hard to implement.”
Evaluate the latest technology—before your boss does. IT pros everywhere are familiar with the scenario in which the business leader hears about a new, innovative technology on the radio while driving to work and calls a meeting that afternoon to rally the IT team to buy and implement the game-changing product. To add to the fun, the new technology might be on a completely different platform from existing technology. In this case, your best recourse is to focus on the business problem that the company leader is trying to accomplish rather than the specific product or technology. If you can’t offer an immediate critique of the technology and propose an action plan, then acknowledge the business leader’s intent to improve business processes. Commit to researching a solution and following up with an action plan. Don’t make your boss drag you kicking and screaming into new technology. Ideally, you’ll be the one setting meetings to brief your company leaders on new technology that can help the business run smoothly and cost-effectively.
Take charge of the proof of concept. When the business needs new systems or tools, your engagement from the outset as an IT professional can help determine the success of the project. Seize the reins of the proof-of-concept phase so that technology considerations are built into the project planning and feasibility assessments.
Know your licensing needs. The most common pitfall in the nuts-and-bolts of budget building is misunderstanding the licensing requirements for products. “Licensing almost always costs more than you think” once you’ve done a true calculation of costs, Reding said. Phadnis added that hardware-related costs also have the tendency to expand. “Everyone talks about creating virtual machines as a way to cut costs, but they don’t always consider whether the physical machine can handle the load,” Phadnis said.
Insist on a training budget. One reason that IT pros are dragged kicking and screaming into new technology is because they lack the skills required by the new platform. When your company is investing in new systems and tools, insist that the budget include training for you and your staff. Well-executed boot camps can quickly pay for themselves by reducing false starts in new technology implementation.
How does your IT budget look for 2011? Do you have new projects on the horizon? Send your thoughts to me via email at [email protected] And follow me on Twitter @michelecrockett.