Controlling Spending 1

[monkeylizard]

This is a fairly vague area, so all opinions are welcome. Obviously there is no one right answer.

I.T. of course has a responsibility to control spending in its own department (i.e. whether or not to buy new a new PC for a developer or make him/her use his/her old one). These decisions should of course be based on a business case. Will the $2000 investment in a faster better bigger developer's station create at least $2000 in income or savings? OK, easy to do for ourselves.

Here's the question:

How far does I.T.'s responsibility extend into other departments for IT spending assuming that IT equipment spending/budgeting is not centralized under the IT department?

Example: Jane Doe in Accounting wants a new PC but the one she has is fine from every conceivable angle for performing her job at a reasonable rate of speed. The Accounting department has the $$ in their budget, but we in IT do not feel that it is a good use of company resources. No business case can be made for the expenditure. Does IT have the responsibility to give our opinion to the Department manager?

Now lets make it interesting. What about when the President or Vice President want something frivolous but expensive here in the middle of an economic recession and hard times at the company? Example: Someone wants a Flat Panel monitor when nobody in the whole company has one. They are of course 6 times as expensive as a normal CRT and no business case can be made for it.

However, nobody knows the economic position of the company better than them. Should this be questioned? If so, to whom?

Thanks for the feedback! Monkeylizard
-Isaiah 35-

 

[heyitsthephoneguy]

I have found life is easier if you don't question certain things. If there is room for a new PC in the accouting budget for an accounting employee, so be it. Who is IT personell to make decisions on what is a good investment of other departments resources.

Give people information so they can make informed decisions. Don't try an make the decisions for them.

 

[Chopstik]

So long as you control the spending within your own IT budget, there is little you can do to contain the (what you may feel to be) profligate spending of other departments. You can inform them if you feel it is unnecessary, but the final decision is theirs and if, at the end of the budgeting year, they have found that they are short, they will have no one to blame but themselves.

Another way to view it may be to consider what non-IT investments they are making that may not be necessary. Does the VP really need that new mahogany desk or high-backed leather chair? Would you try to tell them that was not a wise purchase or good way to use their budget? In the end, it's their decision and one they will have to justify. I tend to agree with heyitsthephoneguy, just let them make their own "informed" decisions. Insanity is merely a state of mind while crazy people have a mind of their own.

 

[heyitsthephoneguy]

Another way to put it....would you like someone outside of IT telling you how to run your budget?

 

[svanels]

In IT you give service and advice. Actually someone has to authorize the spending, and that is certainly not the IT Manager.

In every company there are formal lines and the informal hierarqy. Not knowing the informal rules and company culture, will put you on the street in no-time. Every company has his "untouchables", and they are mostly found in management.

I know a history of a guard who insisted in inspecting the car of a companies 2[sup]nd[/sup] in charge at a gate control. The boss was at his own plant, needless to say that we didn't see the guy again. Steven van Els
SAvanEls@cq-link.sr

 

[KimberTech]

"How far does I.T.'s responsibility extend into other departments for IT spending assuming that IT equipment spending/budgeting is not centralized under the IT department?"
NONE: unless you have advised upon request of management to recommend/approve purchases.

The answer for your dilemma is easy. If you are asked for your opinion, you can diplomatically state the truth without offering any judgement, particularly if a budget is already assigned to a certain dept.

If not....and you are not consulted...don't put your foot in it. I own my company, and if I have room in X budget for extras and there are controls over approval, then it is out of your range of responsibility.

Quite often budgets are spent in full because of the risk of having that allotment decreased if it is not used in the previous accounting cycle. While it may seem wrong, if the following year ALL of that money is allocated for needs, ....well you get the picture.

It is managements responsibility to monitor and approve budgets and see that they are implemented to company satisfaction.
Keep things in order in your own dept. and leave well enough alone in the other ones.

IMHO it is IT's job to maintain the equipment, resolve problems when required, provide backup etc etc and give information to management when asked or when required through description of duties.
If yours is unclear you could ask for a revision or clarification from management on the specific points of what is expected in the above situation.
Kimber

The more I learn, the more I realize how much more there is to know!

 

[svanels]

The role of IT is more an advisory role, so hold it technical. You have lots of ways to ban unwanted equipment.

Reasons: Standarization of equipment
spare parts inventory
preferred suppliers
after sale service
inhouse and external support

Please don't say to the customer that he doesn't need it, because that is looking for confrontation. Steven van Els
SAvanEls@cq-link.sr

 

[elizabeth]

If IT spending in a department is not controlled formally by IT, then I this is not actually a question of eithics at all. It's just plain being nosy to have opinions about how some one else spends thier monty. The IT dept needs to concentrate on the IT budget and responsibilities.

 

[monkeylizard]

Thanks for the positive feedback. As for those who think I'm being "nosy" I also see that every penny spent by ANY department (including IT) affects the bottom line. In the end, that's what matters as THAT is what defines whether or not I have a job in the next fiscal year. I honestly don't care if a manager or any one else has a new $5,000 PC, a new Mahogony desk, a new leather executive chair or a Bell helicopter parked on the roof. What does concern me is wasteful spending TODAY in a recession in an industry that has been hit triple-hard from the Sept. 11th attacks and the downturn in the economy.

I simply have a love of the company I work for an want desperately to see it succeed and I work hard to that end. It's just frustrating to see wasteful spending, budgets or no budgets. I guess I simply have to trust management (C-level) to make good choices and simply hang-on.

Thanks again all.
Monkeylizard
-Isaiah 35-

 

[heyitsthephoneguy]

"As for those who think I'm being "nosy""
Not only do I think you're being nosy, if you keep pushing that issue I think you'll be un-employeed shortly.

What is your job title? Let's say it's director of IT. Now the guy who picks stock out in the warehouse sees you getting a brand new Dell Laptop. Is it their responsibility to say "hey, you've already got one...you don't need another. If you keep buying new equipment, you'll bankrupt the company".

You have no right (unless you're the CEO, COO, etc where you're held responsible for these purchases) to review anyone else's purchases. As long as they have are not using your budget, there should be no issue.

It's admirable you care about the company. But you're not the one responsible for those decisions. Controlling cost is an accounting & executive level function. Not IT.

 

[vaoldschl]

For those lining up against monkeylizard on this issue I have one word that plays a large role in the organization I am a part of and contributes to our survivability: stewardship. I think that everyone within an organization has a responsibility to find ways of reducing unnecessary spending. My organization is so vested in this philosophy that if an employee suggests and implements a program that saves the corporation money then the employee receives half of the money saved in the first year. This policy stretches beyond department lines and is not open to management, who is ostensibly responsible for budget issues.

Of course, the million dollar word for IT folks these days is diplomacy. Woefully gone are the days of the surly mainframe operator. Now we have to warm and fuzzy so you don't just say to the Director of Accounting "Take your req and shove it, what you got works just fine" you say "Well, I don't see anything specifically wrong with this PC but if we upgrade your RAM it should improve your performance level at a significant cost savings to your department." Boom, you just saved a couple grand and made your internal customer happy to boot.

As to the mahogany desk and leather chair, I bet if I took two seconds on a web search I could find you a cheaper one that was just as good.

 

[KlausDK]

Hi all!

It's ok for Monkeylizard to have an opinion on these matters, but is it informed? There could be a number of reasons beyond the sheer technical needs. The manager of the department may want this employee to have a new pc in appreciation of her having saved a lot of money on the department's budget.

I once had a collague who always had the fastest pc in the department. Not because he needed it more, but it kept him happy and motivated. Management should think of more than spending.

KlausDK

 

[elizabeth]

monkeylizard, sorry if I offended and I don't mean to be 'against' you. We all need to respect each others' boundaries, and focus on our own responsibilities, rather than second-guessing each others' decisions. I'm sure you do care about your company but it's not a reason to try to take control. Being controlling is a personal issue. I believe that you 'desperately' want your company to succeed. But, although it may be hard for you to understand, that intensity is repellant to most people. One of the most concerned, hardworking, fair-minded people in my office is disliked by almost everyone because she is controlling and just drives them crazy.

If it is not your job, just let it go. But if you have an employee suggestion program, then go ahead and suggest oversight of IT purchases by other departments. This is a common practice that perhaps your company hasn't considered.