10 essential budgeting tips for CIOs

CIO are pretty good at budget management as it plays to their strong suit of logic and analysis. However, every organisation has its own quirks when it comes to accounting and you need to familiarise yourself thoroughly with their practices to avoid nasty surprises.

"I've seen the situation where someone has had to hold onto the coat tails of the FD and the CIO", says Campbell McLundie of Scott-Moncrieff. The reason was an IT project that was delivered within budget - but ahead of schedule, so cash wasn't allocated to it. Instead of plaudits, the CIO got a kicking from the FD.

Check these 10 tips from our panel and avoid budgeting gaffes.

Make wise purchases
Sound budget management is not unlike good housekeeping. You need to review your purchases and assets regularly to see that you get value for money and do not duplicate and waste money. Spotting what will be important for the business and prioritising these purchases is important. If consumers or clients are buying over the internet, for example, are equipping staff with mobile technology may be the imperative in order to cope with this new business model.


Watch the salary budget
Salary is typically the biggest item on any IT department's budget, accounting for between 50-60 per cent of the total pot. Canny recruitment can yield a huge cost saving. Three years ago, Turning Point charity took the decision to grow its own staff in-house, rather than go out and recruit experienced staff when the need arose. Today two of the original crop have remained and have been promoted, and this talent has been acquired much more cheaply than going to market. Plus, they are highly motivated individuals.

Measure ROI
Nothing's cheap if it doesn't offer the business long term benefit but measuring return on investment is something most businesses are bad at. Making a clear case for all investments, rather than spending your pot as you see fit, clearly builds a confident and transparent relationship with the board. Introducing video conferencing, based on the premise that by 2012 you can cut travel costs by 30 per cent offers clear, measured value, for example.

Who holds budget?
Some unexpected costs can come at you out of left field because IT is so often rolled out on a project basis and costs allocated on a piecemeal fashion. You may come in for a nasty surprise and find costs have been lumped onto your bill, simply because they have a strong IT component. The sort of thing that may get palmed off on IT is the training bill when a new system installed. The risk is greatest when the project's label includes the word 'change': even though the project benefits the whole organisation, often IT finds itself picking up the tab.