Top 3 ways to successfully create and defend your IT budget
Budgets are a touchy subject for anyone, and there’s no one-size-fits-all approach. However, the work ITOps does is integral to the success of your organization, so being confident in building and defending your budget is crucial to getting the resources you need. So what does success look like when it comes to ITOps budgets?
In our recent podcast episode from our series, That’s great IT, I sat down with global IT leader Nigel Peacock to discuss the best ways to justify your ITOps budget. If you’re wondering the best course of action for your organization, keep reading to learn three helpful strategies to set yourself up for success when creating an ITOps budget.
Align with revenue generators and finance
There’s no denying that ITOps provides a valuable service, but IT as a whole does not exist solely to generate any income to an organization. That’s why it’s important to make allies with those who are credited with generating revenue as well as someone in financial planning and analysis (FP&A) and have them be your advocates. According to Nigel, “[someone in FP&A] will help you with the justification as well. Very often, in my last position, they will be the conduit to the CFO. And if you’ve got them on board, they’ve already got the trust of the CFO.” By making the effort to understand their role (and in turn, them understanding yours), you’re solidifying your case for your budget. Using them as a reference when trying to justify higher spend in a particular area, for example, only further strengthens your ask for your budget.
Plan for business growth
Using last year’s budget as a guide for building this year’s ITOps budget is not a smart strategy. There’s (hopefully) going to be significant growth in your organization, which means significant shifts in the needs of your team. Two major metrics to focus on when strategizing for the growth of your organization are licensing and headcount. Nigel gives us a great example of this, “For instance, if HR is on a quest to bring in another 50 people into sales. Well, that’s not a direct effect on the IT headcount. But it certainly has an impact on the services IT has to provide, whether that’s provisioning equipment or licensing or any of the other kinds of peripheral parts of that relationship.” Keeping these two numbers as accurate as possible throughout the year will ensure you have an accurate baseline by which to increase your budget to reflect expected organizational growth.
Additionally, a good way to plan for business growth is by implementing more tools to lessen the workload on your current staff. A good example of this is automation: a great investment that pays off over time. However, justifying the initial investment of automation can be tricky since it usually requires a significant investment to see results. But, by planning ahead for business growth, you’re setting yourself up for success.
Use it or lose it
Understand your budget history and ensure that you’re taking advantage of every opportunity for your team. If you’re able to go back as far as you can in the records of your team’s budget, you can better understand where you’ve been and where there have been increases or decreases in the past. It can never hurt to ask for a bit more than you originally were planning for, since you’ll most likely be negotiating. And if you didn’t already know, it’s important to use every bit of the budget you get approved. Because if you don’t, that money won’t be there the next time.
How to communicate IT budget needs to finance
After you’ve made your plan and taken our advice into consideration, it’s time to go to finance with your budget. This doesn’t have to be the worst part of your day—the process of communicating your team’s budget can be manageable. It’s important to keep in mind that every company has a different style and strategy for budgeting, and some cycles are longer than others. Being patient and having a strong case to justify your spending will go a long way. It’s also helpful to take notes to be able to remember what worked (and what didn’t work) last time.
Check out our podcast
For further insights into ITOps, AIOps, and tech in general, check out our podcast, That’s great IT. We explore timely topics in the tech industry in a fun way and host some incredible speakers, so make sure to follow our podcast from your favorite podcast provider!