When department managers hire a new employee, the foremost budget lines are salary, benefits, training costs, and office equipment. Many times, non-IT business leaders fail to take into account the technology costs—the laptop, the office workstation, the PDA—that are often needed for new staffers.
That’s exactly why one enterprise decided to develop an IT Budget Policy for new users that TechRepublic members can download and customize. As the policy creator explains, creating a new-user IT budget policy requires a team effort, with input from various business units.
How the policy evolved
The first step was sketching out a rough, yet comprehensive policy, explained Mitch Bryant, IT manager for Kintec, LLC, a Kentucky-based manufacturer of wood and light-gauge steel roof trusses and floor trusses.
A senior management team that reports to the company president reviewed the draft. The team features representatives from six key departments, and each member provided input and guidance on the policy. The policy was fleshed out and approved within three weeks.
The team approach, said Bryant, “ensures that Kintec reaps the benefit of all departmental aspects. We are all equal, and this ensures we take care of Kintec and the mission we have for our customers.”
The effort was spurred by several needs, explained the tech leader.
“I wanted to make sure that the department managers not only understood the significant cost associated with hiring a new user, but that they "owned" that cost. Non-IT managers that do not deal day to day with IT purchases need to stay informed of their hiring impacts to the company's bottom line,” he said.
Creating a baseline for costs
In creating the New-User IT Budget Policy, Bryant also established a baseline standard for "other" costs identified with hiring a new employee.
“Far too often, we just look at a new employee's pay and health benefits cost to the bottom line. This policy puts the IT purchase on the same page as the total cost to the company/department of hiring a new employee so that department managers are fully informed,” he said.
The baseline helps tech management forecast budgets, especially when it comes to replacement costs.
“It also gives us a chance to periodically see the bigger picture. It is easy to buy pieces and parts throughout the weeks and months, but when you have to buy the entire required setup, you see the significant impact. By ensuring all departments have an input on this, you ensure the total picture is covered,” said Bryant.
While technology hardware costs are obviously an important budget item, so are the hidden costs within the IT scope, said Bryant.
“If you are running a help desk, I would also consider that impact as well as other software licenses, like specialty software used in accounting, which is often overlooked,” he noted. Other hidden costs include cell phone account setup charges, ISP/VPN needs, initial consumables (toner, etc.), installation charges—all costs that require man-hours to order, receive, configure, train, and set up, said the tech leader.
Renewal fees are also associated with support and maintenance. “The policy ensures IT is aware of the needs before they spring up and are not budgeted for the next year,” he added.
Since implementing the policy, Bryant and other Kintec department managers have identified other costs that come into play with tech budgets, such as the need for additional hub and switch ports. “For telephone system users, we also look at the total inbound voice lines we may need, and for data, we watch closely the bandwidth requirements to ensure they do not create trouble by adding additional users and not decreasing needed bandwidth,” he explained.
To get new-user tech costs on track for better budget planning and cost control, download the New-User IT Budget Policy today.