Establishing an IT Budget is not an easy process, and depending on the scope of your resource oversight, it can easily multiply in complexity. Before we dive into the particulars of establishing the budget, we need to know our client, our client being the staff and infrastructure that makes the company run on a daily basis.
2017 led to many new areas of leadership and discovery. One area I got to play an active role in was IT infrastructure planning and execution. As part of the many activities I performed and lead, none was more interesting than IT Budget planning. IT budget planning has so many dimensions that need to be considered to establish a reliable budget figure, especially in regards to software development companies. In this series, I will discuss many of the lessons learned, how I designed the budget file, what implications I needed to consider for various roles in the company, and tricks I used in Excel for my final report.
The process all begins with a general assessment of where the company is today, what is the company’s mission/source of revenue, and company target in the near and far term. In my case, when I joined the company they have been in operation for over a year, but no budget has been established previously, so I almost was starting with a clean slate. As the Chief Product Owner (official title: Director of Product Management) I had already a solid idea of what the company’s short and long-term goals and the tools needed to succeed. But if you are not wearing many hats (roles) as I did, your first step is to perform interviews with key stakeholders. Your objective is to answer the following questions:
- What does the company do?
- Who are the actors (roles) in the company?
- What do they need to complete their tasks? (aka software, which in turn results into minimum hardware needed)
- Is vendor support programs often used or is community-centric support enough (i.e. forums, online articles, senior support)?
- Which software purchasing programs provide most return on investment (Subscription/Cloud Services vs Perpetual/On-site)
Above is just a start of the questions you want to answer before beginning to develop your budget. My final recommendation is to identify how long you want to forecast your budget. Why do you want to forecast? Well if you come into a young startup (especially in the domain of Software Development) the operating costs can provide a real shell shock to management (get the oxygen tank ready before hitting the send button). Forecasting budget for at least the 2 years that follow will help show how the costs trend south (if team headcount remains constant of course).
In my next couple of posts, I will share
- How I structured the budget file
- What Excel magic I used
- Complexity related to licensing and support with various software vendors (including the massive grey box of Microsoft)
- Typical Hardware/Software requirements per role
Look forward to your thoughts along the way!