IT managers who do their homework can persuade the board that investment is wise

Well-laid campaign plans could win you an increase in next year's IT investment

Well-laid campaign plans could win you an increase in next year's IT investment

As spring approaches an IT director's thoughts turn to the annual budget.

Forecasting accurately how much money your IT department will need over the next year is not an exact science. It is made easier, however, by the large chunk of your budget that is already spoken for.

Up to half your IT costs cannot be changed. Once you have set aside the core money that must be spent replacing defunct equipment and paying staff, any increase in discretionary areas of spending, such as new IT systems and money to help meet new regulations, will be seen to be proportionally much more significant.

Pitching to the board will involve formal and informal presentations. Here the secret is to pitch big numbers and the broad strategy underpinning the next year's IT budget, such as a replacement of inefficient legacy systems or getting IT to support expansion into new markets. An exhaustive break-down of spending rarely wins any favour with a busy board.

One of the most important things you can do is to research what kind of budget the board has in mind for the IT department.

Securing an increase in your budget will depend heavily on how well the board thinks the money was spent last year, return on investment being a key measure.

Few firms are really confident that the economic recovery will continue so selling monolithic projects such as upgrades will still be difficult unless they can promise a quick return on investment. Flexibility in spending will raise the amount you are allowed to invest in IT.

There also needs to be a careful labelling of spending. If you are depreciating capital spending over three years, it can make a big difference when you compare it to spending that is taken out of profit in one year.

Money will be found to support the business units which are making the most bullish plans for next year, so you need to identify these trail-blazers and explain how IT can help them to achieve their targets.

A growing proportion of IT budgets is being spent on legal and compliance-related issues. Regulations, ranging from data protection to anti-money laundering rules for financial firms, have implications for IT departments and need to be reflected in budgets.

Once you have the budget it is important to think ahead to the next one and spend some of it on things that will be highly visible and popular with your fellow managers - such as software to make their annual budgets easier to draw up.

Dominic Connor is head of IT at bond broker King & Shaxson

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