Key point analysis of the hottest IT budget

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Analysis on key points of IT budget

perhaps as the case in this period said, "although the plan can not catch up with the changes, the plan at the beginning of the year still needs to be done.", The annual IT budget is indeed the "hoop curse" of every CIO. The situation encountered by Lu Hui, CIO of Keshi group, is more or less reflected in most CIOs, and more than one CIO communicates with me. How to do it budget can not only make the CEO think that the money is spent on the blade, but also reflect the CIO's own intentions and values. CIO and CEO are like fighting in the dark in a drama of three forks in Beijing opera, How to make it budget truly transparent? The author tries to sum up the following aspects: 4) the hollow stability measurement metal material rod adopts low-carbon boron steel plate:

the importance of financial data

most CIOs are from technical backgrounds. If they can choose whether to do one-year technical planning or financial planning, they will undoubtedly choose the former, but CIOs must fully understand the importance of IT budget. If the CIO cannot make a good financial plan and prove the specific value of technology to the company, his position will be in jeopardy. On the other hand, there is a good opportunity to successfully establish a well-established business plan with proven benefits, which is also very beneficial to improve the position of CIO in the company

in the case, Lu Hui, CIO of the scientific group, frequently exceeded the original IT budget and repeatedly increased investment. A big reason should be that there is no detailed it budget table. The IT budget table clearly presents the detailed capital budget and implementation plan of the enterprise's IT projects throughout the year, enabling the CEO to clearly grasp the various costs and schedules invested in information construction. CIO can use this financial worksheet to ensure the effective implementation of IT investment and project construction, and effectively monitor the project investment and progress. In addition, CIO can also use this table to adjust the project in the middle of the project implementation and evaluate the income after the project is completed

the case does not show whether CIO Luhui has made such an IT budget table. However, if CEO Shen Qiang did not make such a statement, he just felt that his opponent was also on the system, so he wrote a large sum of project funds, which also laid the seeds for the subsequent IT budget overruns. Therefore, it is not entirely CIO Luhui who is wrong. Of course, Lu Hui is the main one. Any enterprise operation aims to make profits. In this way, the CIO must come up with reliable statements to tell the boss that the return on it investment is very considerable. Only in this way can the budget be spent safely

how to calculate the return on investment? First, classify. Draw a list of things to be done in the near future, and classify possible projects in the near future, such as projects that must be carried out, large projects with high returns, and projects that add to the icing on the cake. Then, on the basis of classification, it carries out portfolio management and deeply excavates the predictable income. Different combinations will form different schemes, and then the advantages and disadvantages of each scheme will be explained. In this way, the scheme presented to the CEO not only has basis, but also has several grades for selection. It is more likely to pass, and there will be room for return. Of course, the calculation of return on investment is not taken for granted. Sometimes there are even risks. CIO should not easily promise. There are many factors involved in this. The author found that only 30% of the agents used the order system after an enterprise he had personally experienced successfully launched it, while the planned use rate was more than 80%, which is because of the "it" 1 ldquo; Smart make rdquo; The performance of the system is not only like this, but the Department ignores the training of agents and begins to assert the consequences of the revenue part

it predicts that there is a certain difference between the tensile testing machine for high molecular polymers and the general tensile testing machine for material tensile properties, which is also a long-term financial plan. If Lu Hui did not want to make a long-term plan for the next three to five years after last year's IT budget, then it is impolite to say that Lu Hui is incompetent. If the long-term plan has been made, Obviously, the IT budget for the new year is not so difficult

IT budget that can be refined

as mentioned above, it is necessary to refine it budget as much as possible and consider the factors involved as fully as possible. How to subdivide it budget and how to subdivide it budget is the most reasonable? There are some methods

generally speaking, the IT budget should include two aspects: one is the daily basic cost required to run the original information system, and the other is the cost of planning to launch new application software and infrastructure upgrade. For enterprises with mature informatization implementation, most of the IT budget is used for routine maintenance, often accounting for 80 ~ 90% of the total. A relatively small part of the fund is used for new investment or initial investment. Of course, this is not absolute. For example, for most small and medium-sized enterprises with weak informatization foundation, a large part of IT budget is used for the launch of new systems and personnel training. In addition, many large enterprises are facing the challenge of improving their supply chain management or business intelligence, such as implementing SCM and CRM systems or Bi to greatly improve their supply chain responsiveness or change customer experience. However, launching these systems requires the establishment of large databases and storage devices. Therefore, the investment in launching new systems may be very large in a certain period of time

whether it is the daily expenses or the expenses of launching new applications, in fact, the IT budget is subdivided from the expense categories, including software, hardware, security, consulting, maintenance and training, and the proportion of each part is related to the industry category and information stage of the company. Special mention is made of training costs. At present, the cost of training is easy to be underestimated. Generally speaking, people with a little experience in IT project implementation will not completely ignore the training cost, but they often underestimate the training cost. The reason why the training cost is high is that informatization is not as simple as buying hardware and installing software systems. In fact, in addition to learning software operation, almost every employee must learn a new set of processes, and require management cooperation to make many changes. Therefore, it is necessary to carry out informatization knowledge training for participants of all departments, so that everyone can form a consensus on the system functions and expected effects of informatization in the future. The cost of such change must be included in the training cost budget

most Chinese enterprises have the habit of "emphasizing hardware over software", but now some enterprises' investment in hardware and software is almost equal, and the maintenance cost in software investment is increasing year by year, which is also one of the important signs of it construction from the initial stage to the mature stage

how to allocate budgets for different projects such as software, hardware, security, consulting, maintenance and training depends on different enterprises depending on technology. For CIOs, the principle or core challenge of it budgeting lies in how to effectively formulate the annual it plan. The it annual plan is the basis of the IT budget, and the business demand is the root of the it annual plan. The IT budget is generally made after the business departments have reported the budget, because only in this way can we clearly know which businesses need it technology support. Before making the budget, CIO should effectively communicate with the business departments (in the case, CIO Luhui has not communicated with the business departments), so as to correctly formulate the it plan that meets the business and management development of the enterprise. Although it is inevitable that there will be temporary changes in enterprise IT construction, the general direction is relatively unchanged. Therefore, enterprises should consider and prepare for the medium-term it planning while making the annual IT budget, so as to get rid of the limitation of talking about things on a case by case basis. Of course, if an enterprise already has a mature it master plan, it will be more beneficial for CIOs to grasp the focus of IT investment and develop a scientific and detailed it budget. Thus, in order to make it planning as accurate as possible, CIOs must grasp the pulse of two aspects: one is the development trend of IT technology, and the other is the strategic direction of the enterprise

other key factors of IT budget

Luhui, CIO of Keshi group, has always been the cost center in the eyes of CEO Shenqiang, which is also the current situation of most enterprises. However, in fact, CIO should consider the impact of amortization method, personnel cost allocation, cost calculation or expense difference and other factors on the budget after calculating the budget of software and hardware. These seem to be financial skills. They are just numbers games. It doesn't matter. However, these factors directly affect the final result of the budget and are related to whether the budget can be passed. In order to give the CIO a perceptual understanding, let's take a look at an example of amortization affecting the budget

the company plans to expand its scale and increase its personnel by 500 in 2009. Accordingly, CIO needs to purchase 500 computers, 4000 yuan for each, with a budget of 2million yuan. For this budget, the three CIOs of a, B and C have three different budget methods

A: purchase 500 computers with a budget of 2million yuan

B: the purchase of 500 computers will cost 2million yuan, which will be amortized over three years, and 660000 yuan will be amortized in the 2007 budget year

C: the purchase of 500 computers will cost 2million yuan, amortized over five years, and amortized 400000 yuan in the 2007 budget year

why are budget results so different for the same business? CIO a calculates the expenses of the current year, not the expenses of the current year. Computers are fixed assets and will not be used for only one year. Therefore, the expenses for purchasing computers should be apportioned to each year according to the service life. Then, why should Party B and Party C be apportioned according to different years? It is because China's tax law and accounting system have different provisions on the amortization of computer and other hardware. The principle of the tax law is to protect the national tax revenue and stipulate that the amortization period of fixed assets is 5 years. According to the accounting system, computer products are rapidly upgraded. If they are calculated according to the amortization method of general fixed assets, they cannot reflect the real situation. In order to protect the interests of investors, the accounting system reduces the amortization period of computer products

in today's increasingly popular comprehensive budget, CIO considers the service life in the budget, which not only makes the budget more in line with the requirements of budget control, but also meets the needs of high-level scientific assessment of annual budget revenue and expenditure. Not only computers and other hardware need to be amortized, but software with long service life also need to be amortized. According to the current regulations, the software purchased separately can be recorded as intangible assets with a longer amortization period and lower expenses that should be included in the budget year. For example, this problem is related to the number of new renewal users. It is likely that the number of renewal users will not be renewed in the short term. Therefore, the amortization period should be set longer accordingly

in the budget, in addition to considering the impact of amortization years, CIO also needs to consider the allocation of personnel and service costs. CIO Luhui obviously suffered a lot in this regard. Although there is a team under CIO, it is not necessary to treat these people as their own when making the budget. The CIO is responsible for a large part of the work of the information center, such as computer maintenance. The salaries and office expenses of these personnel should also be included in the name of the corresponding business department, rather than the information center

nowadays, what CIO can take depends not only on the business situation of the enterprise budget year, but also on the budget regulations of the enterprise. Of course, if

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