Who do so many IT Managers, who are often among the hardest working and most dedicated employees within organizations, dislike budgeting so much? These are the very people who oversee the construction and delivery of highly complex systems, almost always under tight time constraints. So the dislike of budgeting certainly is not that it is technically difficult, or that it is time consuming.
We believe that many budgeting challenges are caused because conversations focus almost solely on cost, with only passing acknowledgment paid to value delivered. Someone in Finance, or on the Business side, points out that IT costs have gone up X% during the past few years. Or that IT costs are climbing faster than revenues. That may be true, but cost alone doesn’t tell the complete story. New systems with new capabilities are added over time, so the IT product offering changes. And the higher IT costs may very well have resulted in lower costs elsewhere in the organization, or in new product offerings that generate additional revenue for the company.
Most IT Managers do not have information available to communicate the value they add in language that business users can understand. Nor do they regularly communicate the value delivered during the course of the year. So it’s no wonder that budgeting is unpleasant. They don’t have the tools available to tell their story!
What should an IT Manager do?
Take advantage of every opportunity to communicate value add to your business partners. Evaluate your monthly charge-backs to your businesses – that is the perfect vehicle to use regularly for discussing both costs and value. Are costs assigned to businesses based on consumption? Are your business partners able to understand how their behavior drives costs? Are costs bundled into a form that is easily understood, such as Application and Service Total Cost of Ownership? Are your business partners able to link systems costs to their own unit costs?
We’ll explore how to build effective systems for communicating costs, value add, and efficiency during future installments. We can’t promise you that budgeting will ever be fun. But it can be much less painful if you’ve created the tools and have regularly communicated your value-add throughout the year to your business partners.
Photo Credit: Webiliz