5 Tips For Managing Your IT Project Budget
Money is the cornerstone of any, if not all, businesses. Without money, you can barely run your operations. Due to this importance, business owners aim to reduce expenditure to avail as much money as possible to run operations. In most cases, the only way to do this is by creating a budget.
A budget guides a company’s expenditure, ensuring it doesn’t spend more than it has, which would lead to bad debt. However, as easy as creating a budget might sound, it’s not easy to stick to it. This begs the question; how then do you manage your IT project budget? Read on to get insight on how to manage your budget better.
It’d help to:
- Reduce Expenditure
One sure way of managing your IT project budget is by minimizing expenditure as much as possible. Your IT department should adopt this during expenditure. How?
They can outsource IT services instead of having an entire in-house team. An outsourced provider is much cheaper since you’ll only pay them a one-time fee. You also won’t pay for insurance covers or give allowances. Your expenses will reduce significantly. Visit Advanced Networks for IT services in Los Angeles or one in your locality for more on outsourced services.
The other way of reducing expenses is by eliminating unnecessary tasks of the project. With less to do, you’ll pay less for the project execution. Alternatively, you can combine activities that can take place simultaneously, especially if they require the same resources. What does this mean, and how’ll it reduce costs?
Suppose a system’s upgrade and clean-ups are part of the IT project, and you seek the services of a provider who charges per day of work. You should ensure the workers execute all upgrades and clean-ups in one day, especially if the workload isn’t much. You’ll cater to two needs in one day, for a one-day pay. This way, the providers won’t come in to address upgrades one day and clean up your systems on another day. Here, you’ll pay them for two days, increasing expenses. Why pay more when there’s a possibility of paying less?
However, it’s best to be wary of quality compromise as you combine activities. Ensure the provider delivers quality results. If quality is an issue, just adopt the two-day system.
- Review Previous Budgets
It’s said that it’s best to learn from your past, whether failures or successes. Therefore, start by assessing your previous budgets. The aim is to see if you adhere to your plans.
Identify if you deviated from the set budget, and if so, what were the reasons? By what percentage was the deviation? Which activities offset the budget? By knowing these facts, you’ll better plan your current budget. Since you know your previous budget weaknesses, you’ll ensure to curb them to prevent a repeat. You’ll stick to your budget, enabling you to manage your IT project needs.
- Adopt Cost Control
Cost control is how you’ll ensure you stick to your IT project budget. It helps you be conscious of the financial limits of each operation. Therefore, you’ll allocate funds to ensure you don’t deplete the allocated budget for the said activity. It’s best to let the IT department management know how much they can and can’t spend, including the remaining funds for their operations. With this information, they’ll know how to tread to ensure the funds are adequate.
However, for cost control to work, you must allocate sufficient funds to each activity of your IT operation. It’s the only way to ensure the department head can accomplish their project. It’d help to create the budget with the heads present. They’re better placed to know how much they’ll need for the execution.
Don’t be too lenient with them as you get insight from them. Allocate a reasonable amount; not too little and not too much.
- Factor In Risks
In business, it’s always advisable to expect deviations in your plans. Situations beyond your control might arise, and they might need funding. If you hadn’t factored them into your budget, you’re likely to go beyond your budget, which isn’t proper budget management.
Therefore, it’s best practice to set aside funds to cater to the unexpected. You can get insight into possible risks by assessing each activity of the IT project. Identify possible things that could go wrong, and allocate funds to them. Should they happen, you’ll have funds to cater to them, and in no way shall you offset your budget.
- Bring Everyone On Board
In most cases, plans only succeed when all parties have a clear understanding of the situation. In this case, it’d help to bring in your IT department heads and the specific team leaders for the specific IT operations. Enlighten them on why the budget is necessary. Since they’re the heads, they’ll develop plans to ensure their teams don’t exceed their budgets.
Should there be any concerns about the allocated budgets, address them. Some will complain about insufficient funds to execute their IT projects, with others saying other teams have more funds than they need. Be sure to meet in the middle with all the teams. Failure to, some workers might decide to deliberately hijack the success of the budget as a form of revenge, which isn’t desirable.
The discussion above has shown that managing your IT project budget isn’t challenging. With the right guidance, as this article gives, you’ll have an easy time. Therefore, consider adopting the tips herein also to have a seamless process with your IT.
Adhar Dhaval is experienced portfolio, program and project leader with demonstrated leadership in all phases of sales and service delivery of diverse technology solutions. He is a speaker sharing advice and industry perspective on emerging best practices in project leadership, program management, leadership and strategy. He is working for the Chair Leadership Co.