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First Time Developing an IT Budget

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by oridjinn

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I am looking for examples of... or any tips and tricks in developing an IT department budget for the first time. I am using a product called MP2 that allows us to track all equipment for the IT department, Software, Service Calls, and even place the money spent on the equipment. However, I don't know how to go about starting the budget or organizing how the budget will look. Any help would be greatly appreciated.

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by james r linn

Last year's budget.

I woudl actually start with at least three years worth of budgets so that you can get a trend line; Is demand for IT services going up? In what areas? You can also use your tracking tool to help predict trends.

Remember to factor in special events. Y2K caused a big budget blip. Find out if there are any other blips coming up due to demand in other parts of the company.

Its often helpful to divide the budget into operational and project sides. Find out what it costs to keep the boat floating and budget for that, then add the additional costs of projects as a separate line item.

Labour is the biggest part of your budget for most companies. Your HR department probably has an idea of what you should budget for raises, bonuses etc. You should look at trends to see how much you should budget for overtime. You should also determine how much you set aside for training. The number of projects you committ to will often determine what you contract labour costs will be.

For infrastructure renewal we usually use a 3 or 4 year replacement strategy - for PCs and servers. Thats the point where they go off warranty and maintenance costs can eat you alive. We do recyle the retired stuff, usually into less critical areas like development and test boxes.

Its a good idea to do alot of data gathering before you write your budget. Find out what IT needs for the next year, and what the other business areas need and want from you.

Hope that helps a little.James

by oridjinn

The company never had an IT Budget before, so basically I am starting it from scratch. Since the company is smaller in size (100 users), We never had the need, but we are growing very rapidly. The position I am currently in, was actually created out of need and I was hired in as the second employee ever to have the job (the first was only there 3 months). What they had done in the past, and I was able to get away with last year and this year was just spend what I needed to spend with the owner/bosses approval. Now I am faced with the challenge to create a budget so we can better identify where I money needs to go and how it should be applied. That is why I am asking the question that I am. Thanks for the helpfull tips though, I will be sure to utilize them when planning

by nambass

What I have done, in the same situation, was to identify everything to be replaced and time frames, then all services to be rendered next year (ISP costs, maintenance contracts,licences,...) Operational costs such as stationary, consumabbles, tapes,.. must be estimated unless you have exact figures of the previous year. Salaries and also planned overtime (maybe antisipated overtime) and salary increases to be added as well. then also all new projects must be identified and cost. Don't forget Backup/redundant equipment.

I can sent you two samples (Excel). I want to stress, I am no expert, but my budget at least are sufficient. Also add a few % for price increases.

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