Tech Manager—Tech Management on a Budget

In past articles I have taken you through the Start, Stop, Continue processes for a Tech Manager (CAD/BIM/CIM/CAM…). This was an intro exercise to develop a Strategic Plan. Once completed, you have a great foundation for developing your 2- to 3-year Strategic Plan or 12- to 18-month tactical plan. Then we went through a process that could be used to develop a Strategic Plan.

Once the Strategic Plan is in place, you need to develop an annual budget to make the plan a reality. Funding and budgeting processes may or may not be a formal effort at your firm. Most firms develop budgets, but some do not really include specific technology purchases and just handle them as they come. Either way, you need to develop a budget so you can communicate the needs and prioritize the spending. It makes your planning discussions seem very real when you plop down a spreadsheet of dollars needed and areas of focus.

Most people outside of tech do not know the cost of technology initiatives. They have no clue if what they dream of is a zero-dollar effort or a multi-year, piles-of-cash kind of expedition into the unknown. Your budget helps define that. Once you put money next to an idea, it helps prioritize. Some initiatives might move higher in priority if they take less funding. Others may have to wait until a funding stream is defined before they can start.

So now I turn to the budget. Money is always a good subject for discussion. Budgeting is foundational to the success of a tech manager. You see it everywhere in titles of TV shows, “How-To” discussions, and best approaches such as “DIY on a Budget.” Taking a vacation without breaking the budget. Decorating within your budget. All of these things remind us of staying within our means, not breaking the bank, and getting the most bang for the buck.

But this article is not about how to save money, but how to spend it. The budget I am talking about should enable you to spend money wisely. Your budget should create a measured and planned determination for spending that takes you from reactive to proactive.

With technology, the bank can be drained quickly. Knowing how to create and manage a budget is key so you are not driving your firm to the poor house, but rather getting the best from the limited funds you may have. And it will make it easier to adjust and refocus funds toward strategic goals.

Show Me the Money

First you need to find out if others have defined how much you can spend. I start by asking about the overall revenue of the firm. It can be a general number and not exact. You just need an idea of your firm’s gross profit each year. If they are secretive about it, no problem, you can move forward without knowing.

If you get a number, check on the spending habits by asking accounting what was spent by tech in prior years. You are just trying to get an idea for the boundaries of your reach. If your firm spent $500,000 last year and $400,000 the year before, then your budget needs to hover around that number unless there are dynamic upticks or downturns expected. Whatever the number is, you now have a target to keep in mind. Ask your boss what target number they want to hit on spending. If you are under someone else’s budgeting oversight, you need to know that. Sometimes the developers of the company budget don’t even ask tech staff what is coming. They just pick a number, usually based on what was spent last year.


Where is the buried treasure? Geocaching is a popular search activity/game where participants use a GPS receiver or mobile device to hide containers that others seek, called "geocaches" or "caches," at specific locations marked by GPS coordinates. Sometimes the money in your firms is hiding in a place that you need to seek out. It is not going to come your way; you need to go find it. Sometimes departments have budgets or projects get budgets. Many times I have been able to tap into these hidden “buckets of money” for some of my tech buys via geo-“cash” that I have uncovered.

Get Out Your Spreadsheet

Now start defining some of the hard numbers. These are funds that must be spent to keep tech alive and kicking for the next year. Start with hardware and software. List every piece of hardware you have and how old it is. In warranty or out of warranty? Will it need to be replaced? Do you need more?

I use a spreadsheet to define my budget. Along the left side in column one, I have the heading “Item.” I have rows for each item/type of spending I think is needed. One line for laptops, one for desktops, one for servers, etc. For each row, I have a unit cost. If I buy differing laptops that have different costs, I make separate rows. Low-end laptop, midrange laptop, high-end laptop… you get the idea. Column two is Unit cost. Column three is Quantity (how many I need). Column 4 is Total (cost times quantity). Simple, right? It does not have to be complicated.

I divide the rows into sections, grouping them as hardware, software, training, etc. with a subtotal for each section at the bottom of the Totals column. At the bottom I have the Grand Total.  By breaking out the groupings, I can see what percentage of budget is going to what area. It can get more complicated (and mine does).

Along the top are columns broken out by Department, Site, Group, Project or whatever breakout you or someone might need to see what is being spent where. You will get questions like “120 new laptops—who needs that?” You need to be ready to answer it. That is what the breakout does. If I have it broken out, then the total for Quantity is a rollup of that column totals. You can quickly say, Project 21 needs them and the new satellite office gets 50.

So if you have low-end laptop as a row, then you have company sites as a column, like Chicago, Tokyo, Boston, Denver, London, etc. Under each column you have how many are needed by what site, then they all are added up under the Quantity for low-end laptops. 3+7+2+5+12 = (you do the math J).

If you lease hardware, then put in the annual lease amount, not the full price of the hardware. If you are on subscription for software, put in the annual cost of each license. This is an annual budget. Just add the costs for one year. If you have to buy items spanning multiple years, then include the entire cost, since you will be spending it all at one time.

Don’t forget line items like training, conferences, travel, and hiring consultants. These things can add up and you need them in your budget. I always add some dollars for research and development. This is for exploratory spending. Sometimes you have to buy stuff to make sure it does what you think it might do. Then, when proven, you can ramp up in the next budget round.

Once you have a budget developed, you can parade it around for perusal and approval. Remind the reviewers of the Strategic Plan when you discuss the budget. This is not a new conversation; it is the next step in strategic thinking. Once the budget is in place, you can start spending in a measured and methodical way as you have planned for the items in your strategic plan and now in your budget.

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