Tech Manager—Budget Prep
Every year I have to provide a budget to upper management that outlines where spending should be focused on tech in the coming year. It includes items that must be done, like continued subscription for software, and things that should be done, like replacing old hardware. It also includes things that would be nice to have, like visualization tools and high-end tech. I wrote on this back in May 2020 and Jun 2020, but now I will discuss the prep steps needed to usher in your budget request.
As I prep the documents for defining and presenting my budget for approval, I know that there has to be some groundwork done all year long to make the budget requests more likely to be approved. There is never a guarantee that everything on my budget will garner approval or have the money to actually spend when it comes time to buy, but there are some things that I can do to soften the bottom-line decisions that management and finance has to make. Here are the suggestions based on my past successes and missteps.
Proven Leadership Track Record
Not only do you have to actually provide good leadership, but you also have to sometimes prove it. This means letting people know where you are headed, how you will get there, actually getting there and reminding them that you got there. All without being boastful. You do this by having a plan, working the plan, and celebrating successes with others. By having a good track record, people will tend to trust you and grant you authority over projects, staff and budgets.
Sometimes money is the last authority you might gain. Being able to define what money will be spent on which tech is a privilege. You will always have limits given by others, but you strive for flexibility under an overall fund balance. Step out in your leadership by defining future steps and then execute. Trust will follow and then money will follow that.
Make Personal Connections with Upper Management
Get to know those that you serve. I am not diminishing the need to stay connected to the front-line staff and your peers, but upper management connections are critical. Especially when it comes to spending money. Your budget will need to go up the ladder and land on the desks of many executives that can make or break your efforts. They may not have a real grasp on the technologies you are proposing, but they will be able to say “no” to the funding of those technologies.
When they are reviewing your proposed budget, it they may not realize the planning, effort, projections, and crystal ball thinking that went into your numbers. But they will know you. If your track record is good and you have built relationships, it will help nudge the decision process your way. Upper management must balance many areas that are clamoring for funds. They weigh many needs against other needs. They may have to make trade-offs. When it comes down to deciding between one area or another, your personal relationship with them might help them lean toward your needs. You don’t have to be best friends, just make sure they know what you have done in the past, that you care about the future of the company and that your requests are well thought out. Keep the relationships alive by chatting from time to time or having lunch together.
Provide Good Financial Reports
From time to time, you need to provide a brief report on how your budget is progressing. Be real and honest about your progress and include a projection for the rest of the financial year. Include what was already spent and what was achieved. Define what is coming next. Let them know where you have saved money and how it might be used on something better. Include things that cost more than you budgeted and where the money might come from to keep the budget balanced. One page max, graphics help. Offer to go over the numbers in detail if they request that. Your reports should demonstrate that you have a track record of fiscal responsibility and successful results.
Provide ROI Justification
You may need to justify your budget, so be prepared to provide Return on Investment (ROI) documents. You should be able to define how long it will take to cover the cost of what you are buying. If you want a new plotter, then calc the speed gains per plot, multiplied by the number of plots per day/month and then calc the time/labor saved and outline that as money. Saving 30 hours a month can be converted into average salary savings on labor (not having to stand there waiting for a plot to finish).
This may also mean defining Total Cost of Ownership (TCO) calcs. TCO is what it really costs to have this tech in place. If it is a new plotter, define the cost per plot or that cost of buying supplies, add maintenance and whatever else. This is the true cost, not just the price of the hardware.
When discussing possible budget inclusion, be sure to talk about what “doing nothing” will mean. Will it impact another tech effort? Projects? What about continuing to use old tech. does it increase costs due to maintenance? Keep in mind that not including something in the budget means that you need to let folks know what a delay in progress can mean.
Also think about what will cascade out of your budget. Will replacing one piece of tech mean you will soon need to replace another? And also think about what you would remove if they needed to get your overall number lower. Prep for removals, or others might make that decision for you.
Don’t Introduce New Tech
What? Aren’t we supposed to have new tech in our budget? Yes, you do need new tech and progressive ideas in your budget. What I mean is don’t use the budget to introduce new tech conversations. That should be done in the Strategic Planning discussions. Don’t just drop something into the budget that has not been mentioned before. You need to lay the groundwork for new items. Go back and read my articles on Strategic Planning. That always comes before the budget line items.
Provide a Budget (even if they don’t ask for one)
I provided budgets to management even before they asked for them. They may not have cared, and they may only have a bottom-line max in mind, but it displayed the fact that I was thinking long term in managing money, not just tech. After a few years of doing this, they started asking me to be part of the firms budgeting process.
Conclusion
With today’s tech enabled firms, the largest portion of spending, after personnel cast, is usually technology. You need to be part of the process. By prepping all year long and providing solid data, you can and should be part of your firm’s efforts in defining where the money is spent.
