IT Manager Tips For Creating An Effective Budget

by drjim on August 9, 2012

Image Credit Don't gamble with your team's annual budget!

Don't gamble with your team's annual budget!

Look, as an IT manager you have to create an annual budget for your IT team so just get over it. Since you have to do it, it sure seems like you’d want to find ways to turn this chore into a team building and planning tool. If this sounds like a good idea to you, then we’re going to have to have a talk about just exactly how you can show some leadership and go about making this happen.

Don’t Try To Do It All Yourself

Creating a budget is a big job for any IT manager to take on. If you try to do it all yourself, you may be able to pull it off, but it’s going to crush you. You won’t be able to get anything else done during the time that you’re working on creating the budget.

A better approach it to reach out to your IT team and ask for volunteers. Point out to everyone that by helping you complete tasks such as doing research for various budgetary line items, they can gain valuable insights into how the company’s budgeting process works.

Be Smart About Reducing Costs

It is entirely possible that after you’ve put your budget together, you’ll sit back and realize that the costs that are associated with your budget are too high. When you have this realization, it’s going to be time to do some cost cutting.

How you actually go about doing the cost cutting is where the magic happens. It can be all too easy to just start lopping a percentage off of each area of your budget. Instead, take a look at what your budget is being spent on. Identify the activities that your team will be engaging in that add value for the customer (and which ones don’t). Cut the non-value activities first.

Show How Your Budget Generates Income

At the end of the day, the reason that your management is willing to give your IT team money in the first place is so that the company can make more money. It is going to be your responsibility to use your budget to show them how this is going to happen.

In order to accomplish this, you are going to have to understand just exactly how the company views your budget. It’s not so much a request on your part for funding, but rather a request for the company to invest in your team in order to generate a specific return.

What All Of This Means For You

Your IT dream team’s annual budget is a very powerful tool that you can use to control what the team works on and what they are able to accomplish this year. In order to do it effectively, you are going to have to keep a few things in mind as you create the budget.

Creating a budget can be a big task – it will eat up all of your time if you aren’t careful. Ask for volunteers to help get work done. If you have to cut costs, take the time to make sure you know what activities will add value for the end user and don’t cut those ones. Finally, make sure that you’ll be able to show how your budget generates income for the company..

Nobody ever said that this budget creation thing was going to be easy to do! However, if you take the time to do it correctly and you make sure that it is in alignment with its environment, then you’ll have a powerful tool with which to become a successful IT manager.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: What the best way to determine which activities will generate income for the company?

Click here to get automatic updates when The Accidental IT Leader Blog is updated.

P.S.: Free subscriptions to The Accidental IT Leader Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

We’ve probably all heard about financial statements, but have you ever really sat down and taken a close look at one? If you haven’t, then you should! The reason is that financial statements are how the leadership that runs your company talks about how the company is doing. If you want to speak their language, then we’d better take a look at what you’re going to have to learn…

Be Sociable, Share!

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: