Budgets for IT: A Critical Factor for IT Management, Part 1

by Robert J. Benson, Tom Bugnitz, Bill Walton

In the view of most business and IT managers, IT budgeting exercises are a necessary evil at best and an exercise in deception at worst. Normally viewed from an accounting perspective, for the IT manager budgeting is about getting the maximum dollars into a set of general ledger categories that are relevant to accountants but largely useless for managing IT over the budget year. Given that resources available for supporting the business are driven by budget approvals, and those resources directly drive the manager's capabilities for supporting the business, the budget process and the underlying budget categories need to receive increased emphasis as a critical component for managing IT activities (not just IT dollars). The budget process and the resulting budget should be an exercise in developing and refining an accurate cost view of every activity that IT undertakes, not just an exercise in setting and acquiring resources for the coming budget period.

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Budgets for IT: A Critical Factor for IT Management, Part 1 3 November 2004