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Subject: Information Technology Budgeting

Tutorial: What Every Manager Needs To Know About Budgeting

 

Five Common Misconceptions


No. 2:  The Work Is Too Important Not To Be Funded

Together with the notion that "it’s not my job", this misconception is based upon the mistaken belief that somewhere, someone (or some group) has full knowledge and understanding of the IT organization's needs and priorities and will "do the right thing". The fact is, nothing could be further from the truth.

Recent surveys of non-technical executives and IT managers have underscored the point that when it comes to IT, neither understands what the other is doing or where they are heading. In the words of one senior IT manager "when it comes to IT, senior management doesn’t have a clue". The consequence is that some potentially beneficial projects are not funded, some projects of questionable value are funded, and certain critical low-visibility activities (e.g., infrastructure maintenance) may be underfunded.

IT professionals who believe that the true value of technology is self-evident run the risk of not getting the resources they need to do their job. Relying upon people (often financial management) who don’t understand the technology to independently make reliable judgments about what is important and what is not runs the risk of having IT funding decisions reduced to only two factors: (1) how much does it cost, and (2) how much will we save. (Certainly, both are important; but, consideration of these two factors alone is not adequate to make the best IT decisions.)

Some CIOs who must convince business users to pay for IT have learned an important lesson - the value of IT is not a foregone conclusion and its benefits are not self-evident. That is why IT organizations are under increasing pressure to develop sound justifications for technology expenditures stated in business terms.


What Every Manager Needs To Know About Budgeting, Lesson 3 of 14

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