Reality IT: Proper Budget Planning for the Next Year

Last-Minute Shopping

The need for a last-minute buying spree at ACME, as in most other companies, is intensified by two key factors: fear of cutbacks and staff shortages.

First, our management is concerned that if we go into the budget process without spending all of this year's money, the bean counters will want to cut our budget for the coming year. Second, our 2004 budget was long on technology but short on human resources--we simply didn't get enough people to complete all our scheduled 2004 projects, and we can't start them now without a panic.

Last week, I saw Xavier Beane, our CFO, walk into the office of my boss, CIO Steve Fox. Minutes later, I got word from Fox to make sure there wasn't any money left in our IT budget at the end of 2004. I've seen this same thing happen at other organizations where I've worked. I can vividly recall walking into the storage room a few years ago at year's end and finding a new router on one shelf, a new VPN appliance on another, an upgrade for our network-monitoring software and even a new videoconferencing system--all in original packaging.

Maybe if we had more staff, we could get these new products installed and operational! But back to reality.Over the years, we've attacked the last-minute spending and staffing problem in different ways. One year, we hired contractors to assist with implementing certain systems. Another year, I persuaded senior management to approve more staff to help with last-minute systems implementation. This was no small feat--we had to use industry statistics and our own historical figures to prove that the IT staff didn't have enough time to complete its project load any time soon or even after the end of the year.

Budget Twice, Spend Once

To make your budget work, you must accurately forecast the next few years of project support time your people will need to expend. It's important for the IT manager/director to work closely with other departments so that IT isn't surprised by new project requests sprung in the middle of the year.

I don't recommend using that extra year-end money to purchase jelly-of-the-month subscriptions for your entire IT staff. In fact, you don't need to spend it at all, if having some leftover money won't hurt you in the next budget process. But if you must spend the surplus budget, consider the needs of those who are most critical to your organization. Get upgrades for some of your own staff's computers. Take care of other departments--you'd be surprised at the mileage you can get by bringing a simple, unsolicited RAM upgrade to a group that needs it.

And as you plan the coming year's budget, consider whether you want to be in this situation again next year. Don't approach your budget planning as a wish list--think about what you can realistically accomplish in a year's time.I wish you well in your budgeting for fiscal 2005--and your last-minute spending for fiscal 2004.

Hunter Metatek is an enterprise IT director with 15 years' experience in network engineering and management. The events chronicled in this column are based in fact--only the names are fiction. Write to the author at [email protected].