7 July 2009 • 7:00 am

Irrational IT Budgets

Does your enterprise have a single, all-encompassing budget for information technology spending? If so, I’d like to share with you an argument for an alternative approach to IT budgeting that I developed a few years ago.

Instead of one overall IT budget, imagine putting all IT expenditures into two buckets, mandated and discretionary. Mandated spending “keeps the lights on” to operate the business into the foreseeable future “as is,” without making strategic changes. Discretionary spending is simply how the enterprise chooses to invest to change its technology capabilities.