Putting IT Budgets to Work for the Business

Ann All

Creating IT budgets with business priorities in mind is a best practice IT managers should follow all the time. And yet many don't -- until the economy falters. It's kind of like wearing a seatbelt. You know you should always wear one, but you don't buckle up on a regular basis. But you're pretty quick to do so if an ice storm hits in the midst of a drive through steep and winding terrain.

In the same way, when times are flush IT managers may not focus as closely on enabling business goals as they should. That'll change now that many of them are being asked to cut their budgets. I've seen plenty of stories featuring suggestions on how to cut costs. IT Business Edge blogger Carl Weinschenk included links to several of them in a recent post.

And I especially like this SearchCIO.com piece, featuring suggestions culled from the recent Gartner Symposium/ITxpo 2008, because it focuses specifically on prioritizing IT projects based on business need. In a nutshell: Keep funding the tech initiatives that will directly benefit the business. Consider postponing others until better financial times return.

You can click through to two charts, one designed to help determine a budget based upon the role IT serves at your company and the other to help determine where IT should put its dollars to achieve specific business goals (i.e. "attracting and retaining customers," "improving work force effectiveness").

Another SearchCIO.com article pulls together 25 cost-cutting suggestions from the same event, many of which focus on staffing and sourcing, two topics I feature often in this blog. In theory, at least some of these cost savings can then be applied to those initiatives selected for their ability to provide the most business bang for the buck. Following are a few of my favorites from the list:

  • Switching to more collaborative, team-based models can reduce management costs. Managers should be able to supervise larger groups, with no ill effects on productivity.
  • Adopting a centralized IT, shared-services model offers a great way to leverage company-wide competencies and lessens the need to embed IT personnel in business divisions. (Of course, not everyone is a fan of this approach. See IT Business Edge blogger Rob Enderle's take on it.)
  • Use smart asset-management strategies to eliminate unused software. (And maybe enjoy other cost benefits such as lower insurance costs, as I wrote last April.)
  • Use "best-for-need" rather than "best-of-breed" products, to avoid paying what Gartner's Bill Snyder says can amount to a 50 percent premium.
  • Employ a telecommunications expense-management expert to help you reduce telecom costs. Working with a single, large provider should yield the greatest savings, as I wrote in June.


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