Overview

If my simple view of benefits in the previous chapter was a little hard to accept, you ll find my ideas about budgeting for IT to be even more troublesome.

I was doing some work for a large engineering company whose IT budget constituted some 2.5 percent of their annual turnover. Their CEO had given all sections an instruction that the annual budget was to be presented on a single sheet of paper.

The IT department struggled to present their budget in so simple a way, and eventually presented their budget as a spreadsheet printed on A3 sized paper with a font size of 8 . From top to bottom, the rows listed all the IT activities that were being budgeted for, and across the top the columns listed all the approved account codes for budget expenditure, and against which IT activities would spend the proposed money. In the bottom-right corner, as with most spreadsheets, was a final total.

The CEO took a short look at this wealth of data, looked at the bottom-right figure, and put a pen stroke through the lot, telling his CIO to cut it all by 20 percent.

When I met with the CEO he was distressed that his IT people could not meet his simple requirements, that they could not simplify their budget and that they of all people seemed unable to present him with information he could use to make business decisions.

I ll come back to this case, and how we were able to...