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Why IT Budget Planning Can Give CIOs Nightmares

 
 
By Dennis McCafferty  |  Posted 11-29-2016
 
 
 
 
 
 
 
 
 
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    Why IT Budget Planning Can Give CIOs Nightmares
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    Why IT Budget Planning Can Give CIOs Nightmares

    CIOs struggle to align their budget to business priorities and must adjust financial planning throughout the year to keep up with changing organizational needs.
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    Onward and Upward
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    Onward and Upward

    67% of the CIOs and other senior IT executives surveyed expect their budget to either increase or stay the same for the next year.
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    Labor-Intensive
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    Labor-Intensive

    55% said the effort required to budget for and forecast IT needs can be very challenging, and 38% said the same about scenario planning.
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    Spot-On
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    Spot-On

    70% said they are capable of accurately planning and forecasting IT operating costs, and a similar percent said the same about IT resource expenses, such as labor and vendor services.
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    Off-Point
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    Off-Point

    Just 17% said they can accurately plan and forecast IT service demand costs, and only 30% said the same about project operating costs once a project is completed.
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    Poor Alignment
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    Poor Alignment

    Only 28% of the IT leaders surveyed said they are either extremely or very confident that their IT budget aligns to business priorities.
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    IT Budget Priorities
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    IT Budget Priorities

    Deliver business value: 77%, Improve security: 47%, Remove IT infrastructure redundancies: 25%, Migrate services to the cloud: 22%, Get better control over shadow IT, digital spend on the business side: 19%
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    Crowded Room
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    Crowded Room

    77% said that at least 11 people in their organization are involved with the IT budgeting process, and 28% said more than 50 are.
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    Long-Term View
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    Long-Term View

    54% of the survey respondents said their IT financial planning horizon spans at least three years.
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    Shift Mode
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    Shift Mode

    63% said it takes either a considerable or extreme effort to accurately adjust IT planning throughout the year based on changing business priorities.
 

While most CIOs and other senior IT executives expect technology budgets to increase over the next year, the actual implementation and management of those budgets is growing increasingly complex, according to a recent survey from Apptio. Credit the increase of swift-shifting business and technology trends for this development. Very few survey respondents, for example, said they can accurately plan and forecast for IT service demand costs, as well as expenses associated with project operations. They also struggle to align their budget with business priorities, and find themselves adjusting financial planning throughout the year to keep up with changing organizational needs. At the moment, those needs include support for solutions and services that will drive business value, improve cyber-security, remove IT infrastructure redundancies and migrate services to the cloud. CIOs would also like to use available funds to reign in shadow IT. But these goals could change by next month—or next week. So flexibility is key. More than 120 CIOs and other senior IT executives took part in the research.

 
 
 
 
 
Dennis McCafferty is a freelance writer for Baseline Magazine.

 
 
 
 
 
 

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