![]() Join Flexera’s Conal Gallagher, CIO, and Mark Delisi, Business Value Advisor, to get a better handle on your IT budget planning. With all the unknowns surrounding the current economic climate, how are you supposed to budget effectively for the coming year? More than ever, it’s essential for your organization to be agile and optimize your technology investments. A recent IDC survey found that that 63 percent of CIOs indicated they would reduce IT budgets going into 2023. With inflation still high across the globe, recession a concern of many organizations, global supply chain disruption continuing to cause headaches and the ongoing macroeconomic effects of conflict in Ukraine, future planning is significantly impacted.Īdditionally, unemployment remains low and talent is increasingly difficult to attract and retain. ![]() Once the additional funding amounts are plugged in, the projected IT spending is fully covered for the out-years with only minimal additional contributions of cash. This allows IT leaders as well as the rest of the C-suite to ensure that there are no redundancies between the centralized IT budget and other business unit budgets, thereby keeping overall IT spending lean and in check.Prepare your investments with a strategic IT planĪs we’re well on our way into the second half of 2022, IT budget planning for 2023 is coming into focus. That means the organization must plan to supplement its IT budget with about 4,300 in 2012 and 2,700 in 2015 to balance its budget and spending, as shown in Exhibit 4. While the IT budget rarely includes all of an organization's technology spending, best practices dictates that the IT department still gather a holistic view of technology costs regardless of where they reside. Indeed, even for the technology spend that falls within the IT department and thus with centralized IT budgets, CIOs often devise and manage that budget in conjunction with executive IT steering committees other executives and directors and other information chief executives, including the chief digital officer, the chief data officer and the chief analytics officer. See how better-informed decisions can give you and your organization the greatest chance of sustained success. IT budget approval processĪlthough the CIO has responsibility for the IT budget, the CIO is not the only person to devise and approve of the entire package. Our free, comprehensive guide helps you get the answers you need to accelerate the return on your IT investments and achieve technology value optimization. Marketing applications, such as those that enable social media campaigns and content management systems, are cases in point those costs tend to fall under the marketing spend rather than the IT budget. ![]() Items that tend to fall outside the IT budget include applications deployed for and used by specific business units. Other costs that usually reside within the IT budget include data center expenses and bills for cloud platforms. The IT budget also encompasses hardware expenditures bills for laptops, organization-issued mobile devices, servers, routers and other networking equipment, for example, are typically paid out of the IT department. These encompass, for example, the enterprise resource planning (ERP) application as well as accounting, finance and HR applications. Expenses related to building and maintaining enterprise-wide and so-called back-office systems are also included in an IT budget. To start, compensation costs for IT professionals fall within the IT budget, including costs for external consultants used by the IT department. If that's indeed the case, what does the IT budget include - and what is likely outside its confines? Case in point: In PwC’s 6 th Annual Digital IQ Survey report, released in March 2014, on average, 47% of IT spending reported by survey respondents was outside of the CIO’s budget. In fact, current studies have found that 35% to 50% of an organization's overall expenditure on technology is controlled by business divisions others than IT. Budgeting is simply balancing your expenses with your income. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. However, as IT has become central to business results, the scope and allocation of an IT budget has become more complex, because not all IT spending falls within the IT department. What is a Budget Budgeting is the process of creating a plan to spend your money. The IT budget is typically overseen by the chief information officer (CIO), the IT organization's top executive. IT budget is the amount of money spent on an organization's information technology systems and services, including compensation for IT professionals and expenses related to the construction and maintenance of enterprise-wide systems and services.
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