Four Tips For Better IT Budgeting
Many pundits are indicating the economy has hit bottom and we are starting to come out of the recession. I don't know if this is true, but I certainly hope so. At the same time, no one seems to expect a rapid climb back, which means controlling costs will remain an important factor in our operations.
As you prepare your budgets for next year, you'll no doubt go through many iterations. You may start out with plans for new systems only to be told to come back with a budget that stays flat. Top management doesn't like what it's getting for their money--or believes it is out of sync with what the company is trying to do. Or management may simply not understand IT, and so demand you lower your costs. To appease top management, you produce a number of different plans that include more and more cost reductions.
Budgeting this way, however, can easily lead to a classic death spiral. We dutifully reduce our costs by cutting services where we think prudent; this leads to more dissatisfaction and more demands for reduced costs--and so on and so on, until the cost that is ultimately reduced is you.
Fortunately, there are ways to avoid this.
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