Tag Archives: budgeting

Risk #4: Missing your budget

The fourth risk listed in the Six Key Risks a CIO Must Avoid post is

A CIO who can’t operate within the budget he submits is in real danger.

While you may not have budgeting responsibility as a young IT manager, budgeting must become a core competency for a CIO. The executive management team expects (and rightfully so) the IT department to develop a budget and operate within it so the company can achieve its financial numbers.

If the CIO spends more than he budgeted, , , well, the CEO and CFO have to make up that deficiency somewhere else for the company to achieve its financial plan. If they don’t, their jobs can literally be at risk.

What this says is that CIO’s have to be able to budget and budget in a way that is going to be predictable in achieving their plan.

I’ve developed hundreds of IT support budgets and can’t remember when I failed to achieve the plan. Here are a couple of tips that can help you reduce this risk:

  • Understand that surprises happen and when they do they almost always require more cost.
  • Don’t forget the special projects or events that will occur in the new year, , , they will have costs.
  • Include buffer in larger expense accounts, such as:
    • Salary and employee related expenses
    • Travel
    • Maintenance
    • Telecommunications
    • Training and education
  • Be certain to understand other department manager plans for the new year that have IT support implications.
  • Having an IT strategy so you know what you will be working on is critical.
  • Review past year Profit and Loss reports to identify spending trends, , , be sure you can justify material spending trend changes in the new budget.
  • Review past year Profit and Loss reports for spending spikes, , , these are often annual or semi-annual vendor expenses.
  • Confirm you have all employee related expenses like travel and training associated with any new hires planned.

And finally, do a quick risk assessment on each expense category after budgeting to insure you have taken everything into consideration that might affect spending in this area. Consider things like special projects, events, other department manager plans, etc.

If you need a straightforward process and simple tools to help you budget, take a look at, IT Budgeting: operational and capital budgets made easy

IT Budgeting: operational and capital budgets made easy

IT Budgeting: operational and capital budgeting made easy
Budgeting is not as difficult as many make it, , , all you need is a practical process and a few tools, , , plus insight from someone who has developed dozens of successful IT budgets. A few tips you will receive in this book will save you lots of time and frustration.

Sooner or later you have to learn how to budget and build a plan that is aggressive but achievable. This publication takes you through the process of building a reasonable business plan and focuses on key areas with CIO level insight that are most important to ensure you will meet your budget plans.

My own personal tips and techniques are included that served me well for twenty years of managing dozens of IT budgets.

Table of Contents

Book excerpts

Tools

————————————————————

Buy the entire
Practical IT Manager GOLD Series

$279.00