IT proposed budgeting for year 2005

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Budgeting
Hello to all, and thanks for taking time to read my question. I'm new in the IT field, and still have lot's to learn. Today I was approached by my boss and asked to create a proposed budget for next year. Since I have never done one, can anyone give me any suggestions as to what I can use as a template or a guide. I know what expenses to expect, for the most part, but not sure how to relate that in a budgeting type format. Thank you all for your help, and have a great Holiday. Edwin

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You’d better try to get lot of figures from the previous year to be able to justify your budget.
globally you must have 3 areas:
– Non discretionary cost: supporting your business like WAN, ISP charge, licenses… the business not cut or something must be stop.
– Discretionary cost: for new initiatives. it’s the more flexible part of your budget.
– Capital expenditure: any type of equipment (PC, LAN/WAN equipment, software)…that value is spread in 3 to 5 years

Regards,

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  • Mable44
    I usually mark an additional 10% of the current equipment cost for breakage and repairs in the upcoming year. Termed Repairs and Maintenance. This does not include outside services, just the hardware replacement. Another oversite is Diposal of Old Equipment. With more and more regulations concerning how you can get rid of monitors, UPS etc. It's best to have the funds available if need be. Just a few things to keep in mind.
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  • ANGLER4
    Ah! Budget Planning. What can anyone say about it without laughing our loud or sobbing uncrollably! In addition to what has been already said, I look at budgets from a number of angles. 1. You have your maintenance and your development aspects. Whatever is now in place that you fix must continue to be supported. In the best of cases well written code does not need to be fixed (LOL). Unfortunately, many IT shops are happier running around doing bug fixes and workarounds than writing error-free code. Changes to existing (Enhancements) and outright net new applications must be balanced against the business requirements of the company or division. If only IT got well defined business requirements then maybe, maybe they'd be able to write good code (SU)! In all cases, the bottom line (direction from CEO/pres/BOD) has to be held high when preparing the annual IT spending agenda. Establishing corporate standards for hardware, network, e-mail and devices will help streamline costs but this requires a multi-year plan (investment and injection of serious funds at times). Don't expect to get help from your Finance department especially if IT reports to the CFO. 2. Another angle is how you serve your customers. the E-commerce world (of Internet connectivity) will provide numerous opportunites for you to waste tons of money and deliver nothing yet make everybody feel they accomplished something (LOL,SU). Nevertheless, there are great opportunities to improve sales, customer service and operational effectiveness by adopting some of the new E-commerce utilities/applications/tools. 3. Another angle to consider is the buy versus build dillema. Although your IT department may want to survive by building everything under the sun (SU), we all have to realize that re-inventing the wheel is a waste of effort. Shared services (within a large organization) will provide ROI that both business and IT managers can get pats on the back for. Work with your business partners rather than against them. Definitely conduct joing budget planning exercises so as to align your plan with theirs. 4. Also take a serious look at outsourcing. 5. Finally, have a long term hardware replacement (evergreening) disaster recovery (both business and IT solutions) and succession planning (human resource replacement, training etc...) strategy, aligned with corporate vision for the next 5 years. If your IT shop has highly specialized or trained individuals with 20 or more years of experience, you can be guaranteed they will retire during your watch. Ensure knowledge transfer or bring on bright young IT staff along with the new software you buy or assign them to the veterans so they can pass on their skills. This will impact on your HR budget and won't make you friends with the CFO (bottom line stuff against overhead argument). Well, I guess I have planted enough doubt in your mind that you will ever get the upper hand on IT budget control but it is fun nonetheless. When all else fails, pick a big number out of the sky, multiply it by 3 and add 1 million then use the arguments above to defend/justify your budget. Buy he-man tissues and be prepared to LOL then SU. PAUL
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  • ESuazo
    Thanks for your responces. Does anyone have an old proposal from a previous year or an example of what one should look like? Thanks again.
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  • Howard2nd
    1. Cover page with summary list Required, Planned, Emergency. Include spaces for signatures as approved and keep copy if not original. 2. Second page is Required items - licenses, fees, ISP charges, utility costs. Itemize by user, so there is a connection that new hires are not free. If you are responsible for consumables (printer cartridges, toners, paper, etc) try to show annual growth. 3. Third page is planned items new hardware, maintenance of existing hardware (you do keep logs?). Software changes, additions, upgrades, any new hardware may entail new software. TRAINING - plan it, schedule it, and make sure you get to do it. 'State of the art' is a moving target. Failure to budget for training can lead to many nights of your studying to teach others all that new stuff for 'free'. 4. Emergency - this is the page where you justify the previous pages by listing costs for data recovery, business recovery, litigation insurance, and all the things that will go wrong if you don't do those items. Most of all, don't budget in a vacuum. Check your inventory for hardware ages, talk to the users regularly about their systems. Keyboards and mice are sometimes more important than new printers or revised software. Every time you can relate a budget item to productivity, you win. Is your company stable or expanding? Know what the people around you are doing, it prevents surprises which blow budgets apart.
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  • DrillO
    The advice you have been given so far is very good. I would add one thing.....watch out for pie-in-the-sky managers. My favorite thing to say is " I can do anything, but there are costs". The truth of this statement is that they seem to think we can perform miracles for nothing. Don't get caught...they don't understand that this is not the "home computer" we are talking about. The response about training is dead on. I can't get a budget line for that and it causes much loss of sleep on my part. In short, we are busy enough already..... Good Luck.
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