VOL. 132 | NO. 24 | Thursday, February 02, 2017
3 Reasons IT Should Be in Your Operating Plan
BY PATRICK TAMBURRINO, Special to The Daily News
Your primary focus is raising awareness and funds for your organization. Are you using the technology you have to help you achieve your mission? Perhaps you have thought about expanding your use of technology, but don’t have the time to do it.
That paragraph was the opening of a letter I sent out to nonprofit prospects nearly 10 years ago when I started my information technology consulting firm. While much has changed in the tech landscape over the last decade, one constant remains in all of the small businesses we work with, including our own: IT requires a dedicated line item.
Why? Having cloud-based backup, malware and patch management, and virtualization of environments are no longer a luxury; technology is a critical component to operating any kind of business in today’s environment. Not having the right IT infrastructure in place or funds earmarked for growth can disrupt operating cash flow being drawn against a credit line, or take money from another important budget.
Take a look at your business goals and objectives for 2017. Make sure they’re documented so that you can refer back to your “roadmap” and note progress and opportunities for improvement. When looking at the budget, consider where IT fits in and keep these three hard-and-fast rules in mind:
View IT budgeting as a strategy, not an annual task. This requires more than just plugging numbers into a spreadsheet. It demands that an organization’s leaders work together to proactively define IT’s role in achieving the organization’s objectives. When this is done strategically and holistically, IT becomes less of a cost center and more of an investment.
Set aside up to 20 percent of your operating budget for IT. This may seem steep to some, but remember that there are often hidden costs associated with big-ticket items such as a new facility build-out. Be sure to include other expenses related to a major business purchase, including installation, taxes, routine maintenance, delivery and shipping charges, and employee training.
Link IT budgets to enterprise and line-of-business objectives. Consider multiple investment, savings and roll-out scenarios to determine what best meets your short- and long-term goals and project cash flow. Place your IT components into one of three categories: 1. “Run” budget items that keep the organization operating; 2. “Grow” items for introducing new capabilities or enhancing existing ones; and 3. “Transform” items for research and development-focused initiatives. A proper Run-Grow-Transform analysis can help verify if the IT budget accurately reflects the designated role of IT in achieving the organization’s mission.
A well-thought-out IT budget not only allows an organization to manage its immediate and long-term costs, it offers the agility needed to fine-tune IT spending as changes occur in the business environment. Planning for these will ultimately help your business operate more smoothly and let you focus on your core business activities – growing and serving your customers.
Patrick Tamburrino, the president of IT strategy, support and management firm tamburrino inc. can be reached at email@example.com.