7 Components of a Successful IT budget - IT-
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So, with the groundwork done, you can now move on to the actual budget itself. What are its
components? Well, you have to plan spending for at least the following elements:
1) Hardware – This includes consideration of all physical equipment and tools used for work:
Computers
Telecom – landline and cell phones, etc.
Printers
Wiring (yes, that’s something we can’t forget to cost)
Other physical electronics
2) Software – All the programs that run on your devices. Remember that software firms are stepping
up their software audits. Make sure that you’ve budgeted money to pay for any software you use –
better to pay for it the first time around rather than be fined later down the road for using unpaid
copies…
3) Subscriptions and Services – And 2) applies for software that is licenced and paid for every
month or year instead of a software bought on a one-time basis.
4) Capital – Goods and/or non-financial assets used to produce the firm’s products.
5) Operations – The costs incurred while running a business (although in this case, it’d be the IT
portion).
6) Projects – Costs associated with specific tasks.
7) Rainy Day Buffer – Lastly, money should be set aside for unforeseen expenses. They will happen,
no matter how well we plan.
Follow-Through for Success: Stick to the Budget
So, you have the groundwork and the elements of this budget. You’re not done though. You have to

also make sure you stick to the budget, and constantly check that your spend makes sense as new
developments surface (i.e., a new disruptive technology, sudden market shifts, etc.)! The budgeting
process can only be viewed as a success:
If you keep your spending limited to your planned guidelines;
If you make sure your ROI on the IT spend is worthwhile; and
If you make adjustments in response to big changes.
Remember, just going through the motions of planning isn’t enough. Strange though it may sound, the
budget should be viewed as a living thing more than as a static, unchanging decree!
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Step 1: Set Budget Goals and Strategies
Once you are aware of your budgeting “realities”, you can begin the process of identifying related
priorities, which will shape and refine actual budget results.
Will it be possible to maintain the budget and still provide the necessary services and projects?
If not, what items in the budget can be reduced to compensate?
If budget cuts are in order, how will essential services and projects still be provided?
How will difficult budget decisions be made and communicated?
How will you deal with staff disappointments and end-user complaints?

Step 2: Identify Budget Components
How will IT funding be spent considering staffing, capital investments, supplies, overhead, facilities,
travel and related expenditures?
Step 3: Identify Service Priorities
What are the identified priorities for the IT service portfolio and what are the related operational
costs to deliver these services?
Step 4: Identify Business Priorities:
In order to prepare a realistic IT budget, you must have a solid grasp on business priorities.Based on
business type, current conditions and circumstances, likely business priorities will likely include any or
all of the following:
To cut IT (acquisition and/or operational) costs and related expenditures.
To improve workplace and IT management productivity.
To deliver new or improved technologies.
To eliminate technology (system and/or operational) problems.
To improve IT service delivery and related customer service satisfaction.
To improve performance of in-place technology systems and solutions.
Step 5: Align IT Priorities with Business Priorities:
The final step in this budget planning process is to align IT priorities with business priorities, aligning
technology spending, IT services and related projects with established business goals (all as part of
the IT management vision). As you begin this alignment process, you first need to look at your budget
as a whole in terms of overall goals and management directives.
This is the time to expand the planning scope and make tough decisions.
Do you need to maintain, cut or increase the current budget from prior budget levels?
If you need to maintain the budget levels from your prior budget, will you need to eliminate or defer
any projects or planned initiatives that would require additional spending?
If you need to cut (reduce) budget levels from your prior budget, how will those cuts be made?
Across the board (equally to all budget items)? Apportioned to specific budget items, leaving
others intact? Apportioned to specific budget items, allowing for necessary increases in some
areas, with corresponding cuts in others?
If you need to request budget increases, can those increases be justified on the basis of IT and
business priorities?
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