Budget Cognizance
Or, "why don't those freakin tight-fisted management/budget people approve my proposal for a really cool automation project" ?
Budgeting is an art form…perhaps a lost art form from what I see…yet it is the heart (maybe not the soul) of every IT organization.
“We don’t have the budget.”
I hear this ALL the time. What I actually hear is "I didn’t effectively advocate for my teams’ funding”. To be fair, in some cases you actually don’t have the budget. In others, it's just what managers say when they don’t want to change or take action.
Yep, this disagreement has been going on since Butch Cassidy and Sundance Kid were turned down by the Union Pacific Railroad for a track automation idea - we know how that one worked out!
Budget Cognizance - I can feel quite a few readers grinding their teeth just hearing that term. Early in my career, I routinely annoyed management by being pretty vocal about the importance of what I (and by definition, the company) needed to get done which was being denied by managers and bean counters.
Why were they unable to see the importance of what I was explaining to them and understand how critical it was to take immediate action?
Well, it took me many many years but I eventually found out why.
Just because those management folks and associated bean counters had budget cognizance (they were allotted the money), they weren't necessarily in control of releasing it willy-nilly. Oh no, dear friends, stay with me for all the sordid details...
So, how does this whole budget thing work?
Money allocated to a group/department/etc., is generally not given with a green light to spend as the group sees fit
Money allocation has been earmarked based on (hopefully) a rigorous process which began the previous year (sometimes multiple years back) with requests for funding. These funding requests are based on extensive cost analysis, justification documentation, and usually pros/cons and impacts for getting/not getting funds for specific projects.
Allocations can be from several large pots of money, and each group argues for prioritization based on reasons why they should get some (for simplicity sake, we will assume personnel are already covered)
Money allocated doesn't mean you get it, it's just ear-marked for your group's use. Given that this analysis happened last year before new needs were known or even envisioned, that ‘ear-marking’ can change.
“The “art” of budgeting is to get all the money you need to do what you need to do and to handle the unexpected while competing with all the other groups trying to do the same thing.”
The Pitch
So, given that very high-level summary of budgeting, we have to chat about planning.
As you know, Butch was a meticulous planner. Both Butch and Sundance understood that times were changing. They had some great ideas for the Union Pacific Railroad. Business impacting ideas.
The Railroad told them they liked their idea (uhu), but they didn't have the funds to implement this year. They also told them they needed to generate proposal documentation on their idea, its business impacts, how much it would cost, how many FTE's, resources they would need, and on-going as well as development costs.
There is more but you get the picture. The wheels literally came off the railroad car when the Union Pacific told Butch and Sundance that they would have to submit their proposal for next year's budget cycle, and it might be pushed out to the following year depending on priorities.
The Breakdown
Butch and Sundance thought about that for a while, and sadly turned to a life of crime (not recommended).
(Notice Union Pacific managed to come up with the money to hire the Pinkerton Detective Agency and E.H. Harriman at the last minute. See 4 above)
Keeping the Trains Moving
Budgets are a necessary evil which few people understand and nobody likes. But the trains don’t move without them.
So, what does this mean to you, the developer or the network engineer looking to get a project “greenlighted” (AKA - funded)?
When I managed the IT Organization for the Jet Propulsion Laboratory, I had a 1-million+ dollar signature authority.
You would think with that kind of signing authority, we could sign a few things and funds would be available for whatever we needed right ?
Nope….
There were over 400 people in my organization all needing funds for engineering, research, development, and operations tasks for their services.
The old saying “no battle plan survives first contact” also applies to the yearly budget.
In addition to nifty new ideas for projects, things unexpectedly break, missions have new needs. Naturally, all the cheap things kept running fine and expensive things failed routinely, right after the warranty expired..
The 400+ people in the Organization were broken up in groups, staff members, and support folks. Their needs were vastly different, and all of them involved funding - some examples:
Supercomputing Group
“We really need some more memory for the Crays, it will significantly speed up simulations! Just a few hundred thousand dollars (cheap at twice the price really)”
Cybersecurity Group
“We need some new appliances for monitoring, the Network Group provides a fire hose of data, but we need specific tools to process this information. It will only cost many hundreds of thousands of dollars.”
Operations
“Our Ops Center is really getting dated and we need more space and equipment. We are sure it will probably be less than $1.5M”
Networking Group (oh dear God, these people…)
“We have to do a full refresh on network components on a rolling basis every 3 years. Few million tops! Oh..and there is this great new tool we need that monitors the network (Me: “wait..don’t we have tools for that already?”)
Now,, the good news is that most of the above examples are not “emergencies”. They are all important, deserve consideration and probably should be approved. Would the IT Organization be given the funds to do all of that - probably not (but you have to try).
Every year, each Department has to argue for what they need, and why they need it. The Lab gets X amount of funding from the Prime Contract with CalTech (funded by NASA), and that funding has to be parsed throughout every mission and support organization at the Lab.
Prioritization & compromise become the price of doing business.
As a manager, if you are wise in the ways of budgeting, you fence off some reserve funding, you argue and are allocated some discretionary funds, and cross your fingers you have the funds to react to the inevitable unexpected need.
As a manager, this kind of budget agility positions you for some BIG wins.
Conclusion
So keep some of this in the back of your mind when management gets very interested in your pitch for a great (development, automation, etc.) idea, but doesn't immediately commit funds to getting it done.
As soon as you present your idea, be prepared to answer the following:
Is this just you doing the project (a single FTE) or do you need support from other groups (internal or external), even part-time
Why did you decide to build (or buy)
What resources are you going to need (tools, computers, licences, hosting, etc, etc, etc)
How long will this “really” take
After you complete your project, what is your plan for on-going maintenance, operations, support
WHAT IS THE BENEFIT OF THIS PROJECT TO THE ORGANIZATION?
WHAT HAPPENS IF YOU DON’T GET THE FUNDING
If you don’t take budget cycles and planning into consideration and make them work for you and if you are not ready to answer clearly and crisply the above questions, you and your project will be tagging along with Butch and Sundance to Bolivia.
Butch & Sundance in Bolivia
