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Subject: Information Technology Budgeting

Tutorial: What Every Manager Needs To Know About Budgeting


Five Facts Every Manager Should Know About Budgeting

Fact 3:  Budgeting Is Competitive

How often do you hear a manager say "I have all the money I need to do my job"? Not very often! IT professionals are besieged by seemingly unlimited demands for more, better, faster, cheaper technology solutions to business problems. Demands that rapidly outstrip the resources available for IT.

The natural outcome of resource (i.e., money) scarcity is competition - who gets the money and who spends it. The competition occurs at a number of levels:

  • functional, e.g., more for IT means less for BUs, and vice versa

More for IT mean Less for BUs   and Vice Versa
  • intra-functional, e.g., more for the network engineering group may mean less for PC support

  • work category, e.g., more for new applications development may mean less for infrastructure maintenance

  • project, e.g., more for financial applications implementation may mean less for web implementation

The competition can be healthy (e.g., high priority projects are funded before low priority projects) or unhealthy (e.g., projects serving short-term parochial interests are funded at the expense of those supporting key business objectives). In a sense, there are winners (those that get the money) and losers (those that don’t).

As with any competition, knowing the rules (e.g., the organization’s budget policies and procedures) and having the necessary skills (e.g., writing convincing budget justifications, and business case preparation) can make the difference between "winning" and "losing".

What Every Manager Needs To Know About Budgeting, Lesson 11 of 14

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