Almost all organizations, whether big or small, are having trouble with budgeting, which may result in disputes between the finance and UT departments.
After a poll was taken to determine the rate at which IT budgets change, tech leaders were asked whether their IT budget changes significantly every year. Only four said yes while eight said no.
Usually, IT budgets are determined by the following questions. Will the company be able to carry on with its operations after investment? What investments are needed to achieve cost optimization and growth?
Ken O’Brien, executive vice president and CIO, says that the budget doesn’t necessarily change based on the present technology but the needs of the business. Moreover, firms save some funding for the modernization of technology and for differentiating their products from their rivals.
Another tech-leader said that their budgets are divided into everyday expenditure and new projects. In some cases, budgets are allocated on client bases as well.
When a new technology is launched, costs are high as it includes implementation costs as well in initial years. But as time passes, a further increase is expected.
Budgeting for new projects is heavily influenced by legacy technologies. The technology that has already been created by the firm requires some costs to keep them updated as well. Moreover, modern programming languages are much more efficient than older ones and cost less.
Change in the corporate world, whether it’s organizational or innovative, happens slowly and takes time. Hence, organizations should devise strategies to achieve key goals and use technologies to their advantage.
Furthermore, organizations may also need to look at their existing strategies and formulate new, better ones to achieve future goals. A firm should look forward to prospering rather than being myopic in today’s advancing world.