Future Planning: Get Your IT Budgets Approved

As an IT leader, you’re constantly trying to stretch every 15 cents into a dollar while simultaneously defending your budget. With the exception of security, it seems like anything and everything in your budget can end up on the chopping block, leaving you with significantly less than the 15 cents you fought for last year.

by Erin Geiger, Director of Content at Lumos

The powers that be call it “cost optimization,” but you know better. According to a 2021 Gartner report, “Cost optimization is often a euphemism for cost-cutting or spend reductions that are driven by demands to cut costs in the wake of a business need or an economic-driven requirement.” 

So yes, your annual budget brawl is sometimes thankless but completely understandable, especially in today’s economic environment. However, neither the state of the economy nor the IT industry changes what you need for your team to be at the top of their game – and provide business value to the organization.

But, you already know all of this.

You also know that IT spending isn’t just a cost of doing business today – it’s an investment in tomorrow, for the entire organization. You know the value you provide. And, you know how your team and your investments contribute to the organization's goals. What you don’t know is how to convey that in the next budget discussion. How to get stakeholders and decision-makers to nod their heads in agreement. That’s a great place to start before heading into your next budget discussion, so let’s break it down.

Keeping business needs front and center will create a multi-threaded approach of supporters and strengthen your case when making the budget ask.


IT elevates the entire enterprise, right? With the right solutions and equipment in place, everything else runs smoother, from expenses and payroll to sales and communications. Without them? Well, let’s just try not to think about that too much. Point is, IT creates business value – and your budget supports those efforts. The challenge is getting the boardroom to see that. Keeping business needs front and center will create a multi-threaded approach of supporters and strengthen your case when making the budget ask.

From a very practical standpoint, your cost-cutting, asset optimization, and investments directly impact the goals of the entire organization. The importance of your team to every other department makes IT a business partner, not just a cost center. It’s an important distinction to make when trying to change the mindset of stakeholders – and protect your budget. Remember, you’re talking value, not expenses.

So, go in thinking about business needs first, and think about how IT’s budget will support those needs. By shifting the conversation from “IT as a cost center” to “IT is a critical business partner” you’ll see a dramatic, powerful change in your pitch, your rationale, and your perspective when it comes to justifying what you’re asking for. And by wrapping your ask in broader business needs, you will also change the way stakeholders see you. 

Internally, you’ve also got to get your team on board with your organization’s business goals and objectives. Every spend should align with your company’s broader goals – no impulse buys, no unnecessary upgrades, or early sunsetting of capable infrastructure. Ask: How will we track spending to deliver on our promise? How will we demonstrate value? Be sure every member of your team puts every spending decision through the “how does this help the company?” filter. This approach not only ensures that your team is on the same page, but it sets you up for success in the boardroom.


Don’t show up, hat in hand, with a laundry list of asks. That’s just asking for the red pens to come out. You’re not a Dickensian street urchin asking for “more please, sir?” Instead, be prepared to discuss your budget as a larger strategic prioritization and validation tool. It’s not about what you want or what your team needs. It’s about how this budget will be used to increase efficiency and performance so everyone across the organization can do their jobs better. They’re not here to approve your budget. You’re here to help their bottom line for the next 12 months.

At the same time, don’t fall into the reactionary cost-cutting trap. Slashing costs for the sake of “economic pressures” or panic ultimately impacts risk, business outcomes, and overall objectives. Instead, take a breath. Be analytical. Whether you’re adding to or taking away from the budget, everything should have a rationale or reason. For example, talk about how you’ll use your budget to combat malware and breaches or refresh vulnerable older equipment. Are you continually evaluating current investments to recover and re-invest funds? Did you invest in a successful pilot program last year? Maybe part of this budget will go towards a company-wide rollout so everyone can see the benefit. Or, you’re saving budget by getting rid of an unsuccessful pilot that only impacted a small portion of the company – because that’s how you planned for it.  Correlating how money was (responsibly) invested for previous projects injects an immediate sense of trust and confidence from key stakeholders.

The point is to demonstrate control and clarity. Show stakeholders that you’re handling their money responsibly, and thinking beyond your department. It’s hard to argue against anything that has a reason and an impact.

Correlating how money was (responsibly) invested for previous projects injects an immediate sense of trust and confidence from key stakeholders.


Then there’s the matter of the actual budget. When building it out, do so with the company’s goals in mind. Also build it with your audience in mind – make it easy for them to review it AND approve it. Here’s a basic outline that you can build on: 

1. Review of previous cycle: Acknowledge the environment, highlight your successes and changes from last year’s plan.

2. Goals and objectives: Give a succinct, value-based overview of your plan.

3. Forecast: Make a long-term (five-year?) forecast of your plans, including costs, in bullets.

4. Budget details: Topline priority operational areas and specific projects.

5. Costs: Give realistic costs for each project and operational expenses.

As we discussed above, every spend or cut should clearly map back to the company’s broader objectives and business value opportunities. As you work through the budget, also apply the process of analysis > review > recovery > productivity improvements > reinvestment. Here are some actionable tips for building a bulletproof budget, and setting yourself up for success:

• To ensure your budget request is taken seriously, make sure you draw a direct line to the business value and outcome. Demonstrate that each proposed spend has a direct impact on business goals and mission.

• Keep it simple. Tailor the view of your budget request to your audience, with an understanding of their triggers and pain points. For example, are they focused on assets, technical, applications and services, or overall business goals?

• Be realistic. Be ready to discuss what works and what doesn’t work. Proactively point out your wins, as well as any obstacles or decisions that didn’t pan out from the last cycle. Bring the data to back it up. 

• Calculate and share projected ROI for all spending. Be realistic in discussing the potential risks AND rewards, to identify dependencies and contingencies. Monetize risk whenever possible, and put all dependencies in a business context. 

• Provide reasons and rationales for every decision, whether it’s increasing budget or cost-cutting. This shows that you’re a mindful steward of the funds you’re given. 

• Show your process (and progress) of optimizing current costs and improving asset efficiencies (getting the most “bang for your buck”), and how that will continue into the next cycle.

• For new spend or investments, have successful use cases ready to demonstrate impact. Sometimes one demo or positive statistic can make your point far better than anything you could say.

• Make sure that both run and change budgets are in sync. Spending decisions made independently in either silo can have costs spiraling out of control in short order.

• To avoid surprises, be sure to account for total cost of ownership (TCO) of all IT deliverables. But, don’t go too far into the weeds. When costs are too granular (parts and raw materials), a higher-level audience may target them for cost cutting. Keep it top-line unless a breakdown is requested. 

• Prioritize your spending – this is more for you than for the stakeholders. Realistically, budgets get cut unexpectedly. Prioritize your needs so that when cuts come, you’re prepared with low-priority line items to walk away from.


Next comes the discussion – and hopefully approval. If you’ve followed the steps outlined above, it should be a short conversation. Get in front of the discussion by practicing with your team beforehand to pre-vet questions and objections. Every answer should be framed under the main thought of “this is why this is good for THE BUSINESS.” How? By talking in terms the stakeholders will understand, mapping your budget to specific goals and outcomes, such as:

• Increasing competitiveness

• Automating business processes

• Meeting security needs

• Improving service levels

• Enhancing the customer experience

• Growing market share

• Expanding collaboration

• Optimizing investments

With planning and preparation, you stand a much better chance of getting your budget approved – and continuing to add value to your organization.

Want to discuss how to bring even more value to the table? Talk to Lumos