Cost Optimization Part 2: Why IT Budget Doesn’t End with IT

    August 16, 2016

    By Luis Colon

    In part two of our series on IT cost optimization, we argue that as IT becomes more important to success across all business units, budgeting is no longer just the IT department’s concern.

    In the digital age, IT problems are no longer only the domain of the IT department. Nearly every person and every part of a contemporary business engages in the exchange of digital information, and the range of contexts in which this discipline appears outside of back-office IT administration and infrastructure operations continues to expand.

    But as the power of digital infrastructure becomes more important to all business units, the costs do as well — responsibility for IT budgeting is being distributed throughout organizations, frequently leading to wasteful spending or ineffective allocation. Executives and other leaders who are now stakeholders in the IT budget often have no prior experience managing tech infrastructure and tend to have an inflated expectations of the value various new technology will have.

    All these factors make it incumbent upon IT professionals to communicate effectively about their work in order to ensure that the business has all the tech support it needs. If spend is wasted or if decision-makers are unable to recognize the value in a crucial piece of technology, the continued success of the organization could rest on your ability to demonstrate the value of your work and your infrastructure.

    As more and more initiatives come to rest on the success of digital infrastructure, it’s up to IT professionals to justify their budget and take more control of business decisions. The digitization of the economy is a huge boon for IT professionals, but they’ll have to capitalize on it by demonstrating how dependent business revenue is on their day-to-day work.

    IT Can’t Budget Alone Any Longer

    While the era of digital business presents many exciting opportunities, it also comes with a whole host of new concerns. All this digital information being exchanged heightens the risk that some of it will be of poor quality, and poor integration of IT services and systems can be similarly disastrous. And while cloud computing offers more flexible storage, it leads many companies into the realm of untenable costs through over-provisioning.

    Companies need to do everything in their power to limit the costs of IT services across the organization. Business capabilities and IT capabilities need to be combined. CIOs and CTOs need to sit down with CFOs and leadership, and all parties need to play a role in the business’s budgeting process in order to avoid and mitigate cost and risk. Ideally, the IT operation in any organization would not just run the IT infrastructure and operations, but would also play an active role in the development of digital business strategy.

    Major technological developments in previous decades have brought about lots of excitement and change, but they’ve also led to a lot of budgetary waste — companies often spend more time struggling to figure out how to best implement new technologies than they do reaping benefits from them. Greater collaboration and greater distribution of IT budgeting responsibilities within a business would help reduce waste and avert potential catastrophes.

    Collaborative Budgeting for the Digital Age

    With the right kind of capacity management tools, companies can effectively take the guesswork out of IT budgeting. Organizations should seek out software solutions that provide the accurate, real-time data needed to create rolling budgets, which in turn enables IT managers to take growth projections and product proposals from business leaders and identify corresponding hardware requirements and costs. The tools show IT managers where IT resources are being drained within the company, giving them the definitive data they need to justify their budget to business leaders.

    By effectively identifying waste, justifying spend, and demonstrating the value of given IT processes and infrastructure, you can take control of both your own success, that of your department, and of the business generally. IT expertise is difficult to communicate to others, but as day-to-day operation become more dependent on digital technology, your responsibility as an IT professional is to bring your expertise to bear on the budgeting process.


    Related Posts

    Cost Optimization Part 1: Why IT Leaders are Losing Control of IT Budgets and What They Can Do About It

    Cost Optimization Part 3: Make the Most of Your Hybrid Cloud Environment


    Tags: teamquest
    Category: it-budgeting