It still amazes me that while the powers that control the

funding for IT in government want it to operate like a utility (always on, no

glitches or downtime, already there when you walk into a room), they want to

fund IT projects as one-time expenditures. As you and I know, IT is not a

one-time expenditure, but a continuous investment in resources to keep it

operating like the utility everyone expects.

So how do you go about acquiring the funds to keep

yourself operating? I have observed others’ methods and tried several different

ways myself, and I thought I would throw them out to you for consideration and

possible use. There are pros and cons associated with all of them, and I will

try to mention a few for each.

The first method is what I call grab it while you
can. This method employs building everything–plus the kitchen sink and

a waste can or two–into your budget request for a particular item/project

(including the cost to operate it for several years). This is accomplished by

over buying or buying ahead for maintenance and services (like buying blocks of

hours that the vendor will carry over multiple years) or disguising operating

costs as part of the cost of a piece of equipment or software.

I personally don’t care for this method and like to be up

front with my budgeting, but I have had my detailed budgets for projects

“massaged” by CFOs and budget officers to better enable them to get

funded. They knew that the time was right for a particular purchase and that

the opportunity to get funding for that type of project probably wouldn’t come

around again any time soon. Y2K is a good example; the impacts of major

disasters like 9-11 or Katrina also influence project funding, as well as a

change in administration or leadership. These budget officers also knew that

there would be more flexibility in capital costs/funding that particular year

than in general revenue.

Grant funding is another way of grabbing

operating funds at the inception of a project. Obviously, getting grant funding

for a particular project can help offset current costs (especially if the

current project is already budgeted and approved) but often grants do allow for

administrative overhead in their funding. This administrative overhead can be

defined quite differently from grant to grant, as well as from one budget

office to the next, when interpreting the grant.

However, both of these methods leave you with the

eventuality of having to go back to the well to keep the IT department running.

So how do we acquire the funds to keep the wheels on? Some shops have gone to a

charge-back system–where they charge users of technology (in

other departments) a fee for service. I have seen this work through measured

services and aggregated costs that are passed on as charges. The problem with

the former is that you better be darn good at measuring–and some IT work is

hard to quantify as a charge. It also means you need to run a billing system of

some kind. An example of the latter would be a per-phone or data jack cost or

an FTE cost in which all the costs of your operation are aggregated and then

averaged out on a per unit basis. The problem with this method is that users

can end up paying for services they do not use and if you try and break those

out, it can get pretty messy, particularly when trying to justify the per-unit

charge.

One method that has been used in higher education is to
charge a technology fee. This fee is either a flat, one time-fee

per semester, year, or credit hour. Note that this is different than an

aggregated charge as described above because it is not designed to charge back

all the operations of IT. The fee is an acknowledgement that it takes dollars

to operate and improve IT operations, and the users are going to pick up part

of the tab. The national average per credit hour is somewhere between 5 and 10

dollars for those universities that charge a fee.

I have not seen this method employed in non-education

circles yet (if you have, please let me know and give details–I’m interested),

but it could have some merit in general government IT administration. I can

imagine a scenario where IT departments could charge a per-user fee that is

adjusted yearly with inflation to help offset the costs of continued

operations. This fee could be set at an amount–say $50 dollars per user–and

would be added to the budget of the IT department. These dollars would then be

added to the IT department’s budget as additional funds— not as

replacement funds for general revenue funds that they would already receive.

Yes, I realize that in the long run that there is one

pot of money and that these are all accounting games and none of this should

matter. However, the pot has to be divided and there is never enough money for

everything. How you go about making your budget requests can make a significant

difference in what you get from year to year. It is an ART not a science, and

logic plays very little into the final equation. Because IT is so often

overlooked or considered a necessary evil, it is important to ensure that we do

the best job possible come budget time. While my suggestions may or may not be

what you need to do in your environment, hopefully, they will plant some seeds

that will lend you some flexibility and creativity when approaching yours.