Chapter 2. The IT Budget

   


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T HE SYSTEM MANAGER NORMALLY HAS SOME INVOLVEMENT with the IT budget as part of his job, although the level of involvement depends on the extent of his responsibilities and the size of the enterprise. His budget will form only a part of the overall IT budget, with this budget being the responsibility of a senior manager, such as the CIO or director of IT.

Small businesses do not tend to have a separate IT budget because it is not warranted. Instead, IT expenditure may be itemized as a percentage of the total expenditure, separated out for tax purposes. In this case, the company accountant manages the finances fairly easily.

In larger companies, though, the budget is quite considerable, running from several million to tens of millions of dollars. The finances for IT services must be managed to demonstrate value for money, particularly when service level agreements are present. (See Chapter 3, "Delivering the Goods," for a detailed discussion of service level management.)

This book focuses on larger organizations in which there are probably separate cost centers within the main IT budget and in which the issues are a great deal more complex than with smaller companies. The following list gives a selection of possible areas, in no particular order, that would be covered by the IT budget. The items marked with an asterisk (*) denote those that are normally considered part of the system manager's budget. The remaining items would be managed by other department managers, such as the operations manager or the network manager.

  • Development services

  • Asset replacement and upgrades *

  • Desktop PC management and support

  • Host systems management, support, and administration *

  • Database management, support, and administration

  • Application integration and delivery

  • Administration *

  • Network management, support, and administration

  • Project/stage management

  • Infrastructure management/strategy *

  • Computer operations

  • IT management *

  • Software licenses *

  • IT manpower resource *

  • Training *

  • Expenses and transport *

  • Leasing of communications links

  • Consumables *

  • Research and evaluation of new products

Notice from this list that the IT budget does not merely cover computer hardware and software. A number of "overheads" are often omitted when the cost of providing a service is calculated, with management overhead being a prime example.

This chapter provides an overview of the IT budget, specifically relating to the system manager, covering some of the issues and constraints that he is likely to encounter. It also aims to give some practical guidance when trying to forecast expenditure. The final section in this chapter discusses the chargeback method of earning revenue that some companies employ .


   
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Solaris System Management
Solaris System Management (New Riders Professional Library)
ISBN: 073571018X
EAN: 2147483647
Year: 2001
Pages: 101
Authors: John Philcox

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