Planning your 2021 IT Budget

Planning your 2021 IT Budget

This time of year, we, as individuals and managers, are in the process of summarizing the year's successes while planning and budgeting for the year ahead. As IT leaders, we go through the same processes. Having worked for both smaller and larger companies, I've seen many of the same constants pop up year after year.

How do you get more out of what you have (or ideally more out of less), while at the same time innovating in technological areas crucial to growth?

To do this successfully, you must start with looking back before you can plan ahead.

Let's start by looking at the year's projects and their results. As you are summarizing your team’s accomplishments, track not only what activities were completed and the benefits derived, but also the budget needed to achieve them. What equipment, labor, services, et al went into each function / project / initiative? How does what went in compare to what came out?

In an ideal world, you were able to perform a CBA (cost-benefit analysis) prior to starting any new initiative and felt comfortable that the budgeted cost was worth the effort. In the end, you could then compare that against actual spend and determine the true ROI. However, many times the time needed to conduct a true CBA isn’t available due to resource limitations or time constraints.

We’ll cover the CBA in more detail in the future, but a few key components that should be considered include:

  • Cost of the product – Development efforts, application cost (if not developed internally)
  • Labor to implement – ie: training, help desk, desktop support for deployment
  • On-going support requirements – Internal or external resources (Development, Maintenance agreement, Help Desk, Analysts, equipment needed to run, Cloud expenses...)
  • Licensing for product, software to create, maintenance
  • Benefits gained – More productivity, increased functionality, new business offering

While the above typically refers to a specific product or project, a similar approach can be taken for routine operations that aren’t project specific.

Oftentimes you will uncover opportunities to reallocate portions of the budget that were spent in the past and put them towards an initiative with a higher return in the future.

I would love to discuss any insights or takeaways you have and can be reached at garyl@synigent.com