Guidelines for Annual IT Budgeting

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October 22, 2015

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PresentersSteve LongeneckerDirector, IT Consultingslongenecker@communityit.com

Cedric BoydNetwork Manager cboyd@communityit.com

Agenda• Why budget?

• Organizing your budget

• Looking ahead, past next year

• Questions to ask during the budgeting process

• Let’s look at a sample budgetImage: Ken Teegardin, https://www.flickr.com/photos/teegardin/5537894072, www.SeniorLiving.Org

Why budget?• Anticipate organizational changes

• Develop consensus on IT initiatives

• Fit IT spending into larger context of organizational finances – create constraints

• Prioritize options within IT spending constraintsImage: Honoré Daumier - Online Collection of Brooklyn Museum; Photo: Brooklyn Museum, 2004, 53.166.2.jpg

Organizing your budget• Categories: Personnel, Hardware, Software, Services,

Subscriptions

• Run, Grow, Transform

• Necessary vs. Nice To Have

• Capital, Operating and Project Expenditures

Budget Categories

• Personnel

• Hardware

• Software

• ServicesImage: author is epSos.de from https://www.flickr.com/photos/epsos/5693012875, image cropped

Run, Grow, Transform

Runners Image: Author is skeeze https://pixabay.com/en/runner-long-distance-fitness-557130/Pumpkin Image: Author is Kam Abbott, https://www.flickr.com/photos/kams_world/4047724512Chrysallis Image: Author is Sid Mosdell, https://www.flickr.com/photos/sidm/4813665260

Necessary vs. Nice To Have

Water Glass Image Author S nova :https://commons.wikimedia.org/wiki/File:Glass_Half_Full_bw_1.JPGLemonade Image: Author is PeteLinforth, https://pixabay.com/en/lemonade-can-pop-fizzy-drink-soda-684991/

Description Importance Urgency TimeNetwork Migration / Remediation 95 95 80Datawarehouse Consolidation 30 50 60Program Prep 75 80 40Client VPN Solution 50 60 30Laptop Purchase/Image 80 40 40Linux Server Replacement 90 90 30Website support 85 50 20IS Managing Director Hire 85 40 40Systems Analyst Hire 100 100 20SalesForce Support 70 40 20Survey Options 30 40 10IT Assessment / Budget 80 90 40Offi ce 365 - Email 60 30 100Offi ce 365 - Files 40 30 60Offi ce 365 - SharePoint 70 70 120Offi ce 2013 Deployment 60 60 50Backup/Business Continuity 90 75 40Server Room Cleanup 50 40 20

Capital, Operating and Project ExpendituresDepending on Finance requirements, you may want to note each budget line item with a

C, O, or P.ImageChris Potter https://www.flickr.com/photos/86530412@N02/7932571974

Looking ahead, past next year

Questions to ask when budgeting• Is my organization growing or shrinking (headcount)?• What are our peer organizations doing?• Are there changes to programs that will require IT changes?• What are my on-premise vs. cloud options• What is my organization’s tolerance for risk (downtime, IT

failure, etc.)• What hardware is end-of-life?• What are IT pain points for the organization?• How will desired projects fit into our org’s overall operations?

Looking at a sample budget

Looking at a sample budget

Looking at a sample budget

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Author: DuMont Television/Rosen Studios, New York-photographer, Uploaded by We hope at en.wikipedia http://commons.wikimedia.org/wiki/File:20_questions_1954.JPG

Resources• Donny Shimamoto

– www.cgma.org/magazine/features/pages/20139263.aspx

– www.journalofaccountancy.com/issues/2012/mar/20114439.html

• www.cgma.org/magazine/news/pages/finance-it-collaboration-201512403.aspx