Archive for 2012

« Older Entries

How Setting Assumptions Helps IT Managers To Create Budgets

Thursday, May 17th, 2012
Image Credit A good IT budget requires that you make some assumptions about the future

A good IT budget requires that you make some assumptions about the future

Creating an IT budget for your team sure sounds like a daunting task, doesn’t it? It can be; however, we can take some of the challenge out of this task if we start in the right place. The correct first step that you need to take when you are creating an IT budget is to show some leadership by sitting down and writing out some assumptions.

How Do You Create Assumptions?

Before we go getting all caught up in creating assumptions to help you with your IT budgeting process, perhaps we should have a chat about just exactly what an assumption is. In a nutshell, an assumption in this case is a guess about what you think that the future will look like.

When you are making assumptions in order to help your budgeting process, you are going to have to think about and come up with answers to a number of different questions. These include what your company’s internal departments are going to be requesting from your team in the upcoming year in terms of both new and existing IT products and services.

Next, every IT team is served by a group of suppliers. These can be hardware, software, or perhaps even staffing companies. You are going to have to peer into the future and decide if you think that their prices are going to either rise or fall over the next year.

One key assumption that every IT manager needs to make is in regards to their ability to retain their team. What do you think the employment situation is going to be like over the next year? Are you going to have people leaving for better opportunities or will everyone be staying because there’s no place else to go?

Finally, what is the upcoming year going to look like for your company? Is the company going to have to worry about competitors grabbing more market share? If so, what is this going to mean for the IT department and for your team?

You’ll need to talk with knowledgeable people within the company in order to come up with a good set of assumptions. Your ability to communicate and coordinate your actions with others will play a key role in your ability to create a good list of assumptions.

What’s The Best Way To Create Assumptions?

So if creating assumptions is a key part of your ability to develop an IT budget for your team, what’s the best way to go about creating your assumptions? We can all learn lessons from the past. This means that you can use historical data as a good starting point for developing your assumptions. This will provide you with a base to start from.

Ultimately you are going to end up making a series of guesses about how you think the future is going to turn out. You are going to have to trust your own instincts here.

Understand that you have some homework to do. You are going to have to sit down and perform some research. This may be as simple as seeking out the people who have the information that you need or it may require you to do a lot of reading.

Every assumption is going to come with a set of risks associated with adopting it. You are going to have to make a decision about each assumption: do you want to risk going with it or should you play it safe?

Finally, every assumption that you create needs to be tested. Look for ways to conduct experiments and see if your assumption holds up. If it doesn’t, then revisit the assumption and determine what needs to be changed.

What Does All Of This Mean For You

When your management asks you to create an IT budget for your IT dream team, it can easily appear to be a very large and complex task. In order to transform this into a more manageable task, start off correctly by first creating a list of assumptions.

The best way to create assumptions that will help you to create an IT budget is to answer questions that will require you to get information from sources that have the best information. We’ve discussed a number of different ways to make sure that the assumptions that you are creating are going to help you when it comes time to create your budget.

Some would argue that one of the most important tasks that an IT manager does is to create the budget that will fund his or her team over the next year. In order to complete this critical task correctly, you need to first do a good job of creating valid assumptions. Do this well and you’ll be on your way to creating a very good budget.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: How many assumptions do you think that you should make? Do you think that it is possible to make too many assumptions?

Click here to get automatic updates when The Accidental IT Leader Blog is updated.

P.S.: Free subscriptions to The Accidental IT Leader Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

One of the most important parts of being an IT manager is your ability to create an operating budget for your team. In order for your team to be able to accomplish everything that is expected of them, there will be costs and they’ll do things that (hopefully) generate revenue for the company. If you can show some leadership and get this operating budget right and convince your management to provide your team with funding then your team will have enough fuel in their tank to make it through the year, get it wrong and you’ll end up sitting by the side of the road…

Tags: , , , , , , , , , , ,
Posted in budgeting | No Comments »

The Power Industry Discovers The Importance Of IT Managers

Thursday, May 10th, 2012
Image Credit One industry that realizes the importance of an IT Manager is the power industry

One industry that realizes the importance of an IT Manager is the power industry

For far too long the role of IT managers within many companies has been almost an afterthought. Sure they all had IT managers, but unless the company was part of the IT sector then the IT manager was mostly relegated to making sure that the corporate email system was working, he or she was not considered to be an important part of the company. However, there is one industry where this is not the case – IT managers are being viewed as the key to the company’s long-term success. Which industry you say? It’s the power industry. Let me explain…

What’s Going On In The Power Industry?

Just in case you didn’t know it, there is a set of big changes that are sweeping though the power industry. The folks who run the coal, natural gas, nuclear, and solar energy plants and who provide millions of consumers and businesses with electricity have been doing things the same way for what seems like forever. Until today.

What has happened is that the raw sources of energy, oil, natural gas, and nuclear have become very expensive. These industries are heavily regulated and so they can’t just raise prices. Instead, what they’d like to do is to start to charge more for electricity that is used during the work day when everyone wants it and then charge less at night when they have more capacity than is needed.

This is where the IT manager comes in to play. In order to implement this time-sensitive usage billing, the power industry is rolling out something called the “smart grid”. This requires a “smart meter” to be placed on a home or a business and then a communication link between the power company and the smart meter needs to be established. The days of the meter reader wandering through your neighborhood are going away.

Why Is The IT Manager So Important In The Power Industry?

The reason that the IT manager has risen to become so important in the power industry is because they are starting to become overwhelmed with data. Just imagine collecting 365x24x60 minutes worth of data from millions of customers year after year. How would you collect it? Where would you store it? What would you do with it once you had it? These are all questions that power industry IT managers are being called on to answer.

Just to make things even more interesting, the notion of security has become a hot topic in the power industry as of late. After the incident in Iran where some industrial centrifuges were remotely tampered with by a computer virus, the power industry has realized just how vulnerable they have become.

A power industry IT manager has his or her hands full right now. They need to implement IT solutions that are going to help the company roll out its smart grid solution today. However, they also have to create and implement the IT infrastructure that the company is going to need in order to hold on to all of the data that they collect.

The power industry IT managers are standing at the edge of an opportunity to shine. Once the electricity usage data starts to flow in, they will be in charge of the only department in the company that will be able to analyze the data. They’ll need to move quickly in order to implement the systems that will be needed to process the data and provide the rest of the company with the usage dashboard that they’ll need in order to make good decisions.

What All Of This Means For You

Technology is now at the heart of what almost every company does. The one person in a company who controls that technology and who should be setting the company’s course for the future is the IT manager. All too often, the IT manager has not been as a key part how a company makes decisions..

However, this is changing in the power industry. They are starting to understand the importance of information technology. With the arrival of the smart grid and its need for massive amounts of data collection, analysis, and reporting, the job of IT manager has been transformed. Now IT managers are being seen as key enablers of a power company’s future direction.

All IT managers can learn a few things from these power industry IT managers. Having identified a key industry transformation that required the support of the IT team in order to participate in, power industry IT managers have catapulted themselves into a key leadership role. Watch and learn!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: What do you think that power industry IT managers need to do in order to stay relevant after the smart grid change has been implemented?

Click here to get automatic updates when The Accidental IT Leader Blog is updated.

P.S.: Free subscriptions to The Accidental IT Leader Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Creating an IT budget for your team sure sounds like a daunting task, doesn’t it? It can be; however, we can take some of the challenge out of this task if we start in the right place. The correct first step that you need to take when you are creating an IT budget is to show some leadership by sitting down and writing out some assumptions.

Tags: , , , , , , , ,
Posted in information technology | No Comments »

IT Managers Need To Know: What Is A Master Budget?

Thursday, May 3rd, 2012
Image Credit A master budget brings together all of your other budgets

A master budget brings together all of your other budgets

Who out there likes to create budgets each year? Probably nobody – it takes a lot of work! I’ve got some good news for you, there might be a simpler way to do all of this. All too often IT managers sit down and try to create a single master budget. This can be very hard to do. I’ve got a better way for you to accomplish the same thing in a much shorter amount of time!

What Is A Master Budget?

So just exactly what is this master budget thing? It turns out that no IT team works on just one project during a year. What this means is that your job as an IT manager is instead of trying to sit down and create a single master budget, you need to show some leadership and create a separate budget for each of the projects that your team will be working on.

The trick here is that the company doesn’t really want you to submit a handful of budgets for your team. Instead, they are looking for you to turn in one single budget – a master budget if you will. This means that once you have the budgets for all of your individual projects, you need to combine them into a single budget that incorporates the funding, resources, and returns that all of your projects will require.

Your master budget will summarize the financial projections of all of your team’s individual projects during a given period. This means that the master budget will need to incorporate both your operating budget as well as your financial budget.

3 Questions To Ask About Your Next Master Budget

If combining the numbers that you’ve created for your individual budgets was all that was required in order to create a master budget, then you could turn it all over the finance department and be done with it. However, as with all important things in life, it’s not this easy.

When you submit your master budget to the powers that will eventually grant you funding with which to accomplish all of the great things that you and your IT dream team want to accomplish in the upcoming year, it will be reviewed. This means that you have an additional step that must be performed before you turn your master budget in.

There are three questions that every IT manager must ask about their master budget before they submit it to their senior management for final review and funding approval:

  1. Alignment?: In IT we talk a lot about aligning the work that we do with what the rest of the company is trying to accomplish. These are fine words, but they really take on a great deal of meaning when we are dealing with budgets. As an IT manager, you need to review your master budget and determine if the projects that you are trying to get funded will fit in with the larger strategic goals of the company.

  2. Resources?: There’s an old phrase that says that you can’t get blood from a stone. What this means for IT managers is that before you turn in your master budget you need to determine if the company has the resources (including cash) to fund your master budget. If you are asking for US$100M and the company only has $10M to spend, then things aren’t going to work out.

  3. Value?: You are proposing that the company fund your IT team to do some work. The big question here is if it is going to be worth it for the company. Will the work that your team performs generate enough value for the company to allow it to achieve its goals?

What All Of This Means For You

Every IT manager is asked to create a budget at some point in time – generally on a yearly basis. This can be a challenging task that takes up a lot of your time. However, it doesn’t have to.

You need to understand what a master budget is. It is a single budget that brings together all of the individual budgets that you’ve created for the various projects that your IT team will be working on in the future. This single budget needs to align with the company’s goals, identify the resources that you’ll need, and determine if you’ll create enough value to make it all worth your while.

Taking the time to create a master budget is one of the core responsibilities of an IT manager. Using the divide-and-conquer strategy for building the budget while answering the 3 questions that we’ve identified will ensure that your next master budget will be right on the money.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: How much time do you think that an IT manager should allocate for creating a master budget?

Click here to get automatic updates when The Accidental IT Leader Blog is updated.

P.S.: Free subscriptions to The Accidental IT Leader Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

For far too long the role of IT managers within many companies has been almost an afterthought. Sure they all had IT managers, but unless the company was part of the IT sector then the IT manager was mostly relegated to making sure that the corporate email system was working, he or she was not considered to be an important part of the company. However, there is one industry where this is not the case – IT managers are being viewed as the key to the company’s long-term success. Which industry you say? It’s the power industry. Let me explain…

Tags: , , , , , , , , ,
Posted in budgeting | No Comments »

Why IT Managers Can’t Believe All That They Read About Security Breeches

Thursday, April 26th, 2012
Image Credit Just because you can't keep them out, does this mean that IT Managers can ignore hackers?

Just because you can't keep them out, does this mean that IT Managers can ignore hackers?

If an IT Manager picks up the paper, it seems like hackers are everywhere and getting into everything. Dare I say these modern day cyber pirates seem almost unstoppable? If it turns out that there is no way to keep hackers from breaking into the systems that your IT dream team is creating, then should a IT Manager really spend a lot of time and money trying to keep them out?

The Myth Of The Super Hacker

If you spend any time reading the newspapers, it can be easy to feel that every company out there is under assault. Teams of skilled hackers who go by names such as LulzSec and Anonymous seem to be in the news every other day as they take down or deface various high profile web sites.

No matter what safeguards these firms seem to have had in place, still the hackers seem to be able to slip by them and have their way with almost any IT systems. What’s an IT Manager to do?

The first thing that you need to do is to realize that you can’t lump all hackers together. Yes, there are some very skillful hackers out there who have the ability to cause a great deal of grief for any IT team that they decide to target. However, the good news is that the majority of hackers are not so skillful.

When you are reading the newspaper, you need to take a close look at what actually occurred as a result of a hacking exploit. Did a talented hacker break in and steal valuable customer data? Or, did the IT team just suffer a distributed denial of service attack (DDOS) – a much less skillful form of digital vandalism?

Not all hackers are created the same, and IT Managers need to show some leadership and protect the systems that they are designing from the majority of hackers who are simply looking for an unguarded door that will allow them to break into your digital warehouse of customer data.

What IT Managers Need To Do To Defend The Company

All of this discussion leads us back to the basic question: what should a IT Manager do? The very first thing that a IT Manager needs to do is to not give up hope. Don’t just assume that all criminal hackers are gods. The reality is that most are not. This means that you can’t afford to let your guard down because in most cases the basic steps that you take to secure the systems that your team is working on will be good enough to keep the bad guys out.

This won’t keep the really bad, really skillful guys out. This is when your so-called second layer of defense needs to come into play. As an IT Manager you are going to have to assume that a skilled hacker who really wants to break into your systems is going to be able to climb over the wall of defenses that you’ve put into place.

The question then comes down to what they’ll find once they are in. If you make it easy for them, like T.J. Maxx did when 45 million of their customer records were exposed to hackers, then they’ll be able to run wild. However, this doesn’t have to be the case.

If you anticipate this type of event happening and set up safeguards, you can minimize the amount of damage that a skillful hacker can cause. One of the simplest steps that you can take is to encrypt all customer data that flows between your internal systems.

What a step like this means is that even if hacker gets inside of your systems, he or she won’t be able to easily get their hands on your valuable customer data. Additionally, rogue employees, a much greater threat than skilled hackers, will also be unable to walk off with your company’s crown jewels.

It’s the responsibility of the IT Manager to consider likely scenarios like this. Once you’ve identified something that could happen, you are then obligated to take all of the necessary steps that will be needed to protect your IT team against lawsuits, fines, investigations, and, of course, post-event clean up activities.

What All Of This Means For You

Welcome to the real world IT Manager – stuff happens here. Specifically, there are always going to be hackers out there who are looking for companies to break into. The systems that your IT team is working on could be next on their list.

If you take a look at all of the stories that are being reported in the press lately, it sure seems as though the hackers who are operating these days seem to be able to effortlessly slip into and out of any IT system that they choose. Nobody seems to be safe.

However, if you take a closer look, things become a bit clearer. Specifically, what you’ll discover is that there are actually two types of hacking going on: the simple distributed denial of service attacks and the more sophisticated break-ins. You may not be able to protect your systems against an attack by skillful, educated hackers. However, your management is expecting you to take steps such as encrypting your data so that even if they do get in, the amount of damage that they can do will be minimized.

IT Managers can’t give up. Yes, the bad guys are going to win some of the battles. However, that doesn’t mean that the war is over. Instead, IT Managers need to take steps to make sure that most hackers can’t get in and the ones that do can’t do much once they do get in. Make the effort now and you and your IT team will be safe later on.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: What types of system data should be encrypted and what types should you not worry about encrypting?

Click here to get automatic updates when The Accidental IT Leader Blog is updated.

P.S.: Free subscriptions to The Accidental IT Leader Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Who out there likes to create budgets each year? Probably nobody – it takes a lot of work! I’ve got some good news for you, there might be a simpler way to do all of this. All too often IT managers sit down and try to create a single master budget. This can be very hard to do. I’ve got a better way for you to accomplish the same thing in a much shorter amount of time!

Tags: , , , , , , , , , , , , , , , , , ,
Posted in security | No Comments »

3 Different Types Of Budgets That IT Managers Need To Know About

Thursday, April 19th, 2012
Image Credit When it comes to budgets, one size does not fit all…

When it comes to budgets, one size does not fit all…

The one management task that most IT managers fear the most is the process of creating a new budget for their team. One of the reasons that I believe that this critical task is feared so much is simply because most IT managers don’t realize that there are many different types of budgets that they can create. Once you know the 3 main types of budgets that exist, picking one to create becomes much easier.

Short vs Long Term Budgets

Traditionally, the budgets that most IT managers create for their team are 12-month budgets that lay out the money that their team is going to need during the next year. This is the way that budgets have been traditionally done.

However, it is slowly being realized by many businesses that new types of budgets are called for. There is a need for both short-term and long-term budgets.

Long term budgets cover a time period that is longer than the traditional 12 months. The reason that your IT team may need a long term budget would be if the project (or projects) that you’ll be working on will take longer than 12 months to complete. By creating a longer-term budget you’ll be able to request the funds that you’ll need in order to complete your IT project.

On the other hand, if your company is in the middle of a budget crunch – perhaps it’s a startup, perhaps times are just tough, then a traditional 12-month budget just won’t do. Instead, a budget that is as short as a single month may be required.

Fixed vs Rolling Budgets

We are all used to a fixed budget. Once again, a fixed budget generally covers a 12 month period that makes up a single year. We run around at the beginning of the year and try to determine how much funding our team will need. We submit a budget, it gets approved, and that’s pretty much it for the rest of the year.

A rolling budget is completely different. A rolling budget starts out the same way that a fixed budget does. However, a rolling budget always covers the same amount of time (let’s say 12 months). That means that once you’re a month into a rolling budget, it’s time to create a new budget that extends one more month out.

As you can see this allows a rolling budget to quickly adapt to changes in the environment that your IT team is operating in. However, you’re going to end up spending a lot more time working on budgets.

Incremental vs Zero-Based Budgeting

We all know that that prices go up over time. What this means when you are creating a budget for your IT team is that next year’s budget will probably be incrementally larger than this year’s budget. This type of incremental budget can be easy to pull together – just increase how much you are asking for in each area.

Zero-based budgeting on the other hand takes a completely different approach. When you are creating a zero-based budget, you start the budgeting process with no pre-existing budget. Instead, you start from nothing and construct the budget that you think that your IT team is going to need for the year ahead.

Zero-based budgeting is a great idea for firms that want to shake things up. It prevents IT managers from automatically boosting the amount of money that they request each year by some fixed amount. However, the downside is that zero-based budgeting requires a great deal of time on the part of the IT manager. Creating a whole new budget from the ground up is a major task.

What All Of This Means For You

Creating a budget for their team is a critical part of the leadership that it takes in order to be an IT manager. What all too many IT managers don’t realize is that there are many different types of budgets that they can create in order to fund the activities of their IT dream team.

The length of time that a budget covers can distinguish a short term budget from a long term budget. How long a budget will last is another differentiating factor. Fixed budgets cover a fixed amount of time while rolling budgets are constantly updated. Finally, when you create your next budget you may choose to do it in a incremental fashion or starting all over using a zero-based approach.

No matter how you choose to create your next budget, simply knowing that there are multiple types of budgets can be a big help. Every IT team is different and the different types of budgets can help you match your budget to the needs of your team.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: How much time do you think that you should allocate to creating a zero-based budget for your team?

Click here to get automatic updates when The Accidental IT Leader Blog is updated.

P.S.: Free subscriptions to The Accidental IT Leader Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

If an IT Manager picks up the paper, it seems like hackers are everywhere and getting into everything. Dare I say these modern day cyber pirates seem almost unstoppable? If it turns out that there is no way to keep hackers from breaking into the systems that your IT dream team is creating, then should a IT Manager really spend a lot of time and money trying to keep them out?

Tags: , , , , , , , , , ,
Posted in budgeting | No Comments »

« Older Entries