The annual budgeting season is upon us! Do you favour a top-down or bottom-up budgeting for your IT Operating Expenditure?
Opinions are quite mixed; ranging from: Viewing this as a necessary evil that is time-consuming and distracting from the core job of delivering core IT services to the alternative view that sees this as a value-add.
How can an organisation achieve the balance they need without making it a cottage industry?
The short answer: Follow the 80/20 rule.
Budgets can be broken down into 3 core components: Contracts, Staff and Depreciation. Staff is typically the easiest to manage in most organisations – one that can leverage existing datasets from payroll/HR tools for budgeting purposes.
The more time consuming work is in Contracts and Depreciation. If you don’t have granular product and asset level detail prepared, putting one together during the budget season can be a mammoth task. So, follow the 80/20 rule and focus on 80% of the cost areas so you can quickly achieve a bronze level of granularity. While, this is by no means perfect, it helps you balance your organisation’s needs.