What IT Budgeting Can Do For Your Company

Business buy-in

Working on your IT budget is just about the least exciting and often most mentally-draining thing you can do. Creating new ways to spend money is the bane of business owners. However, it’s important that you do. That’s the bad news; the good news is the work pays off.

If you’re the CIO of your company, you already know how important technology is. The challenge can be convincing the rest of the C-suite. Technology consultant and programmer Erik Dietrich noted, “I can tell you that [using the term technical debt] for shortcuts in the codebase is a powerful one when it comes to communication between the business and the software development group.  When you explain software decisions to managers and MBAs using the language of economics, they get it.”

If you’re lobbying for greater technology spend, an excellent way to get buy-in from the rest of the leadership team is to speak their language.

Technical debt

Technology professionals often cite technical debt as an issue to be addressed in IT budgeting. When a business opts for faster, cheaper technology to handle a problem, they begin amassing technical debt due to the unsustainable nature of the solution over time. Sure, a quick fix can be more convenient and affordable in the short run. However, if a business takes the time and resources to build a quality technology solution, no debt (not to mention interest) accrues.

When decision makers correctly assess the true cost of technical debt, the conversation for IT budgeting can be productive.

Forbes stated, “much like a poor diet, technical debt starts with good intentions but ends in frustrating system failures. Left unaddressed, this debt bogs down systems, crashes software, and causes multi-month delays in product releases.”

Aligning IT budgeting solutions to business needs

If you’re looking to drive innovation and lead your industry in product quality and/or service, you’ll need the right technology to support your goals. By addressing the following factors, you can get your entire team working together to align your IT budget to your business needs and goals.

  1. Create transparency – your business technology is a complicated beast. It’s easy to get lost in the middle of spreadsheets detailing hardware, software, security, vendors, etc. Creating a holistic resource to identify the current state of your technology can help provide a clear picture for your budget needs.
  2. Identify your goals – how will your technology spend drive innovation? Providing a clear plan for the utility of your budget helps decision makers jump on board. According to TechTarget, “if the CEO views alignment of IT expenditures with the plans of the lines of business as key to driving the corporation ahead, then the CIO would be foolish to plan expenditures otherwise. But to achieve alignment, the IT department has to be well-versed in the company’s strategic plans as well as in the business plans of the various divisions.”
  3. Maintain accountability – as with any department budget, your technology spend should be well documented and undergo accountability measures. Creating the case for an increased technology budget is simplified when you provide a simple cost-benefit analysis to those who hold the purse strings. However, it is essential to put systems in place that track efficiencies of processes to ensure investment payoff.

The hidden cost

Strategic IT budgeting is no longer an option for businesses who wish to remain competitive in the current landscape. Without a proper understanding of the utility and necessity of up-to-date and innovative technology, your business could become another casualty of an unforgiving market. If you’re looking for a solution to help you strategically plan your IT budget, Axxys can help. Give us a call today.

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