MISD Growing Literacy: Thematic Units to Teach Michigan’s ...
Misd chap 6 budget
-
Upload
ediey-smile -
Category
Education
-
view
847 -
download
0
Transcript of Misd chap 6 budget
BUDGETING
MGT OF ISD (IMS452)
CONTENT
Budgeting Budgeting Process Lease versus Buy: Which one is better Other Budgeting Factors to Consider Strategic Business Priority Factors Priority of Investment in IT
Strategic Systems Traditional Development Decision support Systems Infrastructure Investment Business Process Redesign Maintenance and enhancement of Existing
Systems Purchasing source Trends in ISD Operation
OVERVIEW
Budget is a specific amounts of money to specific departments within a company for a single period of time (fiscal year)
IT Dept usually have one of the largest budgets in the organization
How the manager manage the money and how the department spends it
The Process of Budgeting
Review the previous years’ budget Potential items
Personnel Hardware Software Telecommunication Services Supplies Travel and entertainment Miscellaneous Depreciation Physical Plant Outside Services Overhead
Review the budget draft with Superior Staff
Cont.. The Process of Budgeting
Estimating (or overestimating) the numbers Getting approval and defending the budget During the year: Tracking and revising the
budget from the previous budget reports (budget amount, actual amount, variance against budget) Revising the budget
• Include additional project • Eliminate or reduce costs for cancelled
or scaled down project• Update on other changes • Demonstrate anticipated cost reduction
LEASE versus BUY: which one is better
Lease = renting for a specified period of time
Pros and cons of Leasing
PRO Predictable payments for
easy budget projection and administrations
Allows companies with limited cash flows, lines of credit to obtain expensive equipment
Allows for predictable and planned turnover of equipment that’s regularly replaced
Don’t need to own the equipment
Depreciation and interest on debt may produce potential tax benefits
CONS Extra effort during
purchasing to coordinate activities between leasing company and equipment vendor
Complications arise if equipment is upgraded during the life of the lease: leased / purchased
Additional effort to track inventory precisely when to be returned
Packing and shipping or the returned equipment could be burdensome
It could require extra effort to properly code each lease invoice if equipment are chargeableDecision by the Financial
Departments with input from IT
Other Budgeting Factors to Consider
Growth of your department’s workload IT workload, upcoming activities and projects
Technological change Able to forecast the need to upgrade, obsolescence
and replacement Staff
Turnover staff – recruit and train the new staff Software maintenance
Maintenance agreements Maintenance – ability to get upgrades for the
product Support – ability to get assistance
Hardware maintenance Formal maintenance agreements Time and Material contracts Warranties
Cont… Hardware Maintenance
Factors to consider in Maintenance Agreements Days and hours of coverage required Response time guarantees Plans for spare parts Whether the vendor or its technicians are certified Pricing Financial penalties
Time and Material contracts When you place a service call for a piece of hardware,
the vendor will bill you for the technician’s time and the parts that are needed
STRATEGIC BUSINESS PRIORITY FACTORS
Integration with top management’s strategic agenda
Policy committee and user influence groups
Diversity of Information Technologies
PRIORITY OF INVESTMENT IN IT
Strategic systems Development of systems to support and
influence current strategy Traditional development
Those applications that support transaction processing and information reporting
Decision support systems Those systems that support managerial
decision making (dss,expert system, Executive info system)
Cont ..PRIORITY OF INVESTMENT IN IT
Infrastructure investment Investment in corporate wide technology
(intranet, extranet) Business process redesign
Those applications of IT involving major changes on existing business processess
Maintenance and enhancement of existing system
Purchasing source trends in ISD Operation