budget holders and ICT refresh

pma111
pma111 used Ask the Experts™
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we have had complaints from various budget holders in departments in the company that hardware refresh (e.g. end user kit, such as desktop/laptop) and software refresh programs (e.g. new versions of office) are often poorly communicated and "dropped" onto budget holders last minute and this doesnt allow them to properly budget year on year for these kind of exercises. Currently a bit unsure on what kind of process or policy should be in place to allow budget holders for forsee ICT costs to build into annual budget planning. How are your budget holders informed at your companies, what policies/processes do you have in place to keep them informed?
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Business Consultant (Owner)
Most Valuable Expert 2012
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Commented:
We account for hardware centrally so as to amortize it.

For software and like stuff that goes to cost centers, we approve at a management level and expect managers then to plan for the expenditure (not a surprise).

We do the same process at annual budget preparation so that people have advance notification of what might be happening.

The key is communication with the stakeholders.
Along with John's comments, close to what my former company did, you could also look at a shared services model.

We basically charge the departments for their consumption, so a desktop has a monthly cost and this cost includes replacing hardware and changeback of all provided IT services.  Then the departments budget monthly expense, and the only additional annual expenses would be large projects that may take multiyear planning.
Distinguished Expert 2018
Commented:
What is the current cycle for equipment refreshes? I would assume it's somewhere in the 3 to 5 year window and it's been planned such that only so many tend to get replaced in a given year.

Every company is different in this regard. How is the ICT budget handled, as its own item or does it get charged back to the other departments? More importantly, how often does ICT communicate with the other groups in terms of budget? Sounds like you should be having discussion with them year round to ensure they understand what's going on. Education is the key.

But I have also known a number of organizations that like to overlook ICT all of the time, then complain when expenses increase just to keep things at current levels because of lack of maintenance before.
JohnBusiness Consultant (Owner)
Most Valuable Expert 2012
Expert of the Year 2018

Commented:
Amortization method answered here

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