Tips for Justifying a Budget Increase for IT
As your organization’s IT lead, you have your finger on the pulse of your IT strategy and infrastructure’s strengths and weaknesses. You build on the former and confront the latter each and every day. Add to that an IT landscape that changes rapidly and constantly, and, while it’s a daily challenge, no one is in a better position than you to plan for the future IT needs of the company.
The fact is, though, not everyone sees what you see and knows what you know. And when it comes time to present your case for an increase in the information technology budget to address security, capacity or other existing or impending challenges, you find it difficult to explain what seems so obvious.
In many cases, making your case for an IT budget increase to your bosses is like trying to explain to someone the mechanics of breathing or exactly how you ride a bike. You’re in the infrastructure trenches every day, and stepping back to recognize the perspective of others and shape an argument that wins more money can be challenging.
So, to help you win your case in 2018, here are 4 tips for building your case for an IT budget increase:
In order to win your budget argument, you have to have evidence. You must be able to show why certain aspects of the IT infrastructure are working and how they can do more for the business; conversely, you need to show where the infrastructure is struggling and how it is negatively impacting the business.
Simply saying so won’t work.
Every IT lead worth their salt collects data. Some certainly do this better than others. So, if your data collection and analysis capabilities need work, focus on making them better. If they are strong and robust- or when they become strong and robust- then it’s time to understand what data to report and how to deliver it strategically to budget decision-makers.
Don’t Data Dump: Report IT Data Strategically
This is not to say we’re suggesting you cherry pick data and bury negative trends. It is to say that your IT data needs to be presented in a way that speaks to business needs and pain points.
Instead of presenting IT in an abstract, technical way that many might not comprehend, show how an increase in budget for IT can help:
- Reduce company risk
- Improve employee productivity and efficiency
- Reduce budget dollars/save money in other aspects of operations
- Increase profitability of a service line or product
- Generate more sales, memberships, or brand awareness
The key is to focus on how an expanded IT budget used strategically can help improve the business, not just your department.
Shifting your perspective from how will this help me do my job better to how can I solve a budget-decision maker’s or a business pain point goes a long way to making a stronger argument.
Offer Choices and Alternate Solutions
Do your homework before walking into that budget meeting. That means being prepared to present data strategically (link it to business goals) and to offer a menu of possible budget levels and solutions.
You might come to the meeting with an ideal budget level and investment strategy. However, presenting only the ideal scenario might make it easier for the holder of the purse strings to dismiss your approach and just say no.
Build out at least three options, listing out the pros and cons of each from the perspective of the business, not the IT function. Illustrate in the simplest way possible how a reduction of budget in one area, or an increase in another, can respectively hurt or help the organization.
Every opportunity you have make the decision-maker see IT not as an operations expense like utility overhead or heating costs. Instead, present options that reposition IT as an investment that will yield strong ROI. By presenting well-thought out options, you make it harder for the budget gatekeeper to say no and easier for them to compromise or meet in the middle.
You might not always win that ideal budget increase, but you likely won’t walk away empty handed either.
Reposition IT as an Investment, Not an Expense
The essential strategy for winning the case for increased IT budget allocations is to reposition information technology as an ROI-producing investment rather than an expense line item.
You can achieve this by:
- Tracking performance data carefully
- Presenting data strategically
- Linking IT data and budget increases to business objectives
- Offering a menu of possible solutions and budget options
- Creating a shift in how IT is perceived by senior executives and key stakeholders
Finally, don’t go it alone. Get help with building your case for stronger IT investment. Enlist your team (if you’re not an IT department of one) and other departments that could benefit from stronger or different IT investment.
Partnering with your colleagues can help provide additional data, insights and political support in your fight to continually improve your organization’s IT strategy and infrastructure.