For many companies the new year means a new budget.  For most of these companies the budget planning has been in full swing for a couple of months.  If your company is like most it also means you are not really all that close to having your IT budget finalized yet.  This breakdown usually occurs because the requested budget and what the CFO/CIO agree on approving takes several iterations.  For some companies their budget won’t reach final approval stage for another few months.  As IT professionals the  lag between start of the year and budget approval can be a source of great frustration.

In IT terms this means the projects that are supposed to start on work day 1 of 2010 won’t actually get underway for quite some time.  This translates to projects that are rushed or overdue before they even start.  This time of year is a great time to think about how we create our budgets, what goes in to them and ultimately if there is a way to speed the process.

The biggest challenge most people face is pulling together all the information, from many sources, to create the skeleton of the new budget.  Sometimes this means polling business units for their upcoming projects, pulling maintenance contracts out for review, planning headcount changes and figuring out what needs to be upgraded next year.  The shear volume of information in most fortune 1000 companies makes this a full time job for some “lucky” individual (if not a team of them).

While this is a very traditional approach to planning and managing the IT budget, it is probably one of the most time consuming and least efficient ways to get it done.  These days there are many alternatives that can help speed the time it takes to create the first pass budget.

One idea that will help is asset management software.  By simply knowing what you have, when it was purchased, when it’s warranty runs out and what it is currently being used for, you can speed the creation of the operating budget.  Say for example you need to know the dates you will need to add maintenance for any server with an expiring warranty, a simple query of the asset data will tell you this.  If you put purchase price of the system in the software you can also get a pretty close total to the dollar amount it will cost you.  If you don’t have the purchase price at least you will have a nice report to send to your support vendor to get a quote quickly.

Another idea that will help with creating the capital budget more quickly (I know I sound like a broken record) is to make sure IT and business are aligned.  In doing this IT should have a good idea of what projects the business will be looking to complete in the next year.  If you are following best practices you should already have a roadmap of when these business processes need to go live and can work backwords from there.  Again, it is easy to send this to your trusted business partner (VAR, reseller, manufacturer) and have a budgetary quote put together.

Once you have the budgetary numbers for each project and our operating expenses, I would recommend storing them in a database.  This becomes an invaluable tool when it comes time to revise the budget.  At a minimum if you can change the requested and approved dollars for each cost you can generate your second budget pass in minutes rather than days.  Sure the data entry up front takes a bit longer but it is well worth it.

Speaking from experience, if you can pull it together, make changes quickly and provide answers and next passes by hitting a button, you will be invited to a lot more budget discussions.  After all isn’t this what you have been striving for, for IT to be part of the business project discussion from start to finish.

If you are unsure about how to build the database, don’t fret, there are several specialized spftware packages and software as a service sites that can help.  Leave a reply if you would like some specific recommendations.

As the new year approaches I hope you all have a prosperous, exciting 2010!