Thursday, October 3, 2013

Surviving the Budget Cycle - Tips & Tricks

We all have to deal with it. We all loathe it. We all complain about it. We all get through it. 

We are talking about the budget cycle. How many of us actually use it to our advantage? Fiscal years fall on different boundaries for different organizations. Budget approaches vary widely and cost-plus, to zero-based and others. I have worked in places where the budget never changed from year to year and I have worked in places where every year we prepared 5%, 10% and 15% cut scenarios for the consideration of the budget department.

No matter how wonky your process is, there are certain things that will usually help you survive it.

Start Early  
You have to start before anyone else does, and starting means you decide up front what is important. If you want until the budget packet is sent to you to fill out, you have lost. Get your staff together, get your customers together, get with your boss and have discussions over what needs to change, what the priorities should be, what has worked in the past, what the obstacles are.

IT Budgeting is Different 
We can't sell the IT budget the same way Marketing or Distribution sells their budget. Frequently IT budgets benefit a wide range of business services and verticals within the larger organization. Because we are typically a service support and enterprise function it is important that you get your customers to advocate on your behalf. Does the budget request for the email system upgrade help the Police department? Ask them to mention it in their budget presentation.  It is always more powerful when multiple customers as on your behalf.

Realize the Timing
For some people in government budgetting never really stops. Someone asked our budget director when the development of the next fiscal budget would begin. He answered without missing a beat "the day after this one is approved". Realize that every meeting, briefing, and review of projects is an opportunity to lay some groundwork for the next budget cycle.

Be Visible
I have observed an interesting phenomenon in IT I call the turtle-syndrome. When IT people think a cut or a downsizing is imminent, they immediately go low-profile. They seem to think "out of sight, out of mind", and if they just pull into their shell management will pass them by when deciding cuts. The sad thing is that just the opposite is true. When people are making funding decisions about the future of the organization you want to be visible, you want to be recognized, you want to be seen as someone who is working hard and getting stuff done. As a leader if you model this, your organization will follow. Budget cycles are a time to SHINE and bring attention to all the great things you have done, are doing, and will do in the future.

Know Your Value
Budget season is also a time for senior leaders to "re-balance" funding between organizations. Be prepared for this. Maintain a portfolio of technology assets (people, programs, hardware, licenses, services) and be prepared to illustrate the impact of reducing any of them. The portfolio should include users associated with each asset, importance to the organization, investment to date, anticipated replacement cycle, etc. This can be a huge effort to compile. Many IT managers will just be told to absorb a cut in the budget, and unless you have the valuation of your assets and understand the impact, all you can say is "yes boss".

Clear Objectives
Be crystal clear about the needs, how you can address them and the objectives that you want to set. Make sure your organization knows the objectives and they are bought in. Again, you have to start this process way early to be effective because this takes time to get right.

Make Others Successful  
To protect your budget and gain more budget for technology investment, others need to understand that you will be ultimately making them successful. IT projects that only benefit IT get cut. Period. IT projects that are tied to the success of other departments get a second look and naturally get advocacy from those departments. You will only be as successful as you make others through your technology efforts.

Leverage Your People
It may surprise you to know that not everyone hates budgets as much as you do. I have people on my staff that actually like the budget process. Spread the work around. Use it as a growth opportunity to develop junior people.

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