Lakshminarasimha K is Practice Manager, IT Service, Support and Operations at Infosys BPM.
In a recent incident, one of the major airlines in Europe was hit by an IT failure, resulting in substantial chaos. The ‘systems issue’ impacted the airline severely, with 10 flights from Gatwick and 81 flights from Heathrow being cancelled, and a hit to the company's finances as well as brand image.
A tremendous load is put on IT infrastructure to ensure seamless business operations and avoid unforeseen mishaps like these. How can organisations plan their tech budgets to always be up to speed?.
The challenge is that IT departments usually struggle with budgets. So, how do you rationalise costs?
In the race to meet both top-line and bottom-line growth targets, saving every dollar is critical for maintaining QoQ and YoY margins. Zero-Based-Budgeting (ZBB) is one of the major levers for enhancing growth margins.
ZBB is a method of budgeting developed in the 1970s. It starts from a "zero base" at the beginning of every budget period. It analyses needs and costs of every function within an organisation, and allocates funds accordingly, regardless of the budgets allocated earlier. The primary objective is to prioritise costs for effective business growth and compliance.
Technology budgets usually have two major categories: Discretionary items and non-discretionary items.
Non-discretionary budgets usually sail through the approval process, while discretionary budgets go through multiple reviews and negotiations that require compelling business cases. Categorisation of technology items into discretionary and non-discretionary areas is also one of the key factors for success in budgeting exercise.
Quoting Joe Biden, the former vice president of the United States, “Don't tell me what you value, show me your budget, and I'll tell you what you value.” The fight for budget allocation will continue, but it can be put to rest by showcasing the value for the organisation.
The author is Practice Manager, IT Service, Support and Operations at Infosys BPM.