Software for IT Budgeting and Planning?

MoneyConscious asks: "My company is still pretty small (100 people) and has never had any real structure around much of its operations. I manage the IT group and would like to get a handle on our yearly budget - expected expenditures for planned (and some unplanned) projects, plus regular maintenance and growth. I've taken a crack at a few different spreadsheets, but always seem to come up with something a few weeks later that requires a re-write of the budget (for instance, planned versus actual cost). We are a mix of Windows and Linux, so I have some flexibility in regards to budgeting software solutions (web-based SourceForge apps, Excel templates, and the like). What tools do you use to keep track of estimates and record actual expenditures to see how your budget process is doing?"

Comments

Start with what you spend today

[duffbeer703]

You need to figure out what you spend now to plan ahead.

Get some spreadsheets together that break down all of your costs... keep a tab of staffing, consultants, licensing, hardware & software acquisition, hardware & software maintenance, and overhead. (rent, utilities, travel, copy machines, secretaries, miscellaneous)

Once you do that, you'll actually be in a position where you can control your costs and can create accurate & fair cost estimates for expansion of the services you offer (and the money that you spend)

Its a real pain in the ass to get started, but it pays dividends quickly. At a place where I worked, the IT shop billed its "clients" (other divisions of the company) based on the number of PCs that each client owned. After breaking down the costs, it was discovered that for most clients, user counts drove costs more than hardware counts, and that some divisions of the organization were in effect subsidizing others.

A new hybrid billing methodology that billed for acutal costs ended up being for more equitable and less obtuse.

Suggest a more systemic approach

[QAPete]

You might be well-served to speak with the top financial person in your organization to develop a more systemic solution. If your company does not have an IT budget, I can only assume that there are other aras within your company that are not budgeted. Most companies like to categorize expenses into 'accounting logical buckets', and include items such as salaries, benefits, office supplies, maintenance, licensing, hardware, even going to things like departmental depreciation and office furniture.

If you're going to set up an IT budget, it would make more sense to me to dovetail that into a company-wide strategy that your accounting folks and upper management support. After all, the reasons you'd want to provide structure are to track and report performance to management, utilize budgeting and planning to justify the things your department has done and want to do, lay the groundwork for additional human resources, etc. As a result, you'll want to be speaking in a language and format that management both supports and understands.

As for my experience as a Director of IT, I start with a rolling three-year strategic plan, reviewed bi-annually and signed off by the President and his staff. Flowing from that are my expense budget and capital budget. Expenditures are tallied against account numbers and tracked monthly. Capital items are scheduled by quarter. Both are tied to the strategic plan. Major projects receive detailed project planning via a statement of work, and are tracked to time and budget using a simple spreadsheet and/or GAANT chart.

Day-to-day project planning, including what used to be 'walk-in' requests, are handled by aweb-based system (developed in-house) where end users can make requests (including predicted cost savings), I either reject requests or assign them to an employee, the employee carries out the request, documenting what was done, time taken, testing performed, etc., and the end user ultimately 'approves' the request by indicating that the work done satisfies the request requirements. This approach is also Sarbanes-Oxley friendly, btw.

Emergency work is done and documented with my approval, and is documented post-mortem.

I have never needed to track my employees' use of time. As with every IT department I have ever been associated with, the amount of requested work far outweighs the available time. My people and I are busy from the moment we walk into work until we leave for the day. For the value a good IT department can provide a company, I have never seen a need to have them 'punch a clock'. Tracking overall project status is more than enough.