Post on 12-Apr-2017
Ignite Baltimore: Best Practices for IT Management: Investment‐
based Budgetingor
How I learned to stop worrying and love the budget.Prepared by: Eli Senter
1
Contact Us - Elias Senter-President - www.4S- LLC.comLocations: Bowie MD, Crystal City VA, Kailua HI, Maui HI
Phone: 443.693.7331 Fax: 703.682.6804 Email: info@4s-LLC.comCAGE Code: 7BHT9 DUNS Number: 079719608
Native Hawaiian Owned 8(a) - Graduation Date 26Feb2025 - Primary NAICS: 541511
2 copyright 2016 N. Dean Meyer and Associates Inc.
Investment-based BudgetingBudget for what you want to sell,not just what you want to spend!
N. Dean Meyer
best practices in financial management
Slides by these guys….
3
Eli Dean
Audience….
4
IT Manager
CFO/COO
Targets
5 copyright 2016 N. Dean Meyer and Associates Inc.
Traditional BudgetsHow They (Don’t) Work
DE
LIV
ER
AB
LE
S
Project 1
Project 2
Service 1
Compe
nsati
on
Trainin
g
Licens
es
Travel
EXPENSE CODES
Traditional Problems: Game playingBudget PaddingCutting fatLoss of trust
6
Traditional Problems: Micromanagement
7
“Do you really need another admin?”
“Is that training necessary?”
“Monitoring tools… I thought that was what admins are for?”
Traditional Problems: “You Cut”“Just do what is best for the business…”
Abdication of responsibilityDivorce from business goals
8
Traditional Problems: “Missed opportunities”
Not suggesting new projectsConstrained innovationOr worse, eating your seed corn.
9
Traditional Problems: “Black hole syndrome”
Lack of perceived valueYou cost too muchYou suck
Lack of demand signalPoor “more with less”
solutionsUnrealistic expectations
“We already gave you all that money! What are we getting for it?”
10
11 copyright 2016 N. Dean Meyer and Associates Inc.
Traditional BudgetsHow They (Don’t) Work Micro-management Game playing “You cut” Lost opportunities “Black hole” syndrome, lack of perceived value Poor decisions Allocations ≠ Utilization Unrealistic expectations
The way you
present your
budget
Chargeback and Allocation SchemesAlso fail.
• So. What can we do?
12
13 copyright 2016 N. Dean Meyer and Associates Inc.
Fresh Perspective Business within a business Clients = market
14 copyright 2016 N. Dean Meyer and Associates Inc.
Obvious Conclusion…. You don’t get budgets/allocations to pay your costs
You get money to buy your products and services
15 copyright 2016 N. Dean Meyer and Associates Inc.
Investment-based BudgetingD
EL
IVE
RA
BL
ES
Project 1
Project 2
Service 1
Compe
nsati
on
Trainin
g
Licens
es
Travel
EXPENSE CODES
16 copyright 2016 N. Dean Meyer and Associates Inc.
Negotiate the RowsSubmit the Columns for Tracking
DE
LIV
ER
AB
LE
S
Project 1
Project 2
Service 1
Compe
nsati
on
Trainin
g
Licens
es
Travel
EXPENSE CODES
Chargeback and Allocation SchemesIn investment based
budgeting:Budgets can be related
to business decisionsBy turning the
‘checkbook over’ to internal customers, demand signal can be used to convert departments to entrepreneurships
Turn budgeting circus… um…process… into a meaningful discussion
• So. What can we do?
17
18 copyright 2016 N. Dean Meyer and Associates Inc.
More Information
www.FullCost.com
NDMA Inc.
203-790-1100
Dean@ndma.com