4.10. Building the IT plan and budget

A properly managed demand pipeline, comprising both new projects and keeping the lights on, should go a long way towards helping the annual planning process, which results in the IT Plan and the corresponding IT budget for the next financial year.

The IT budget would basically be prepared in three stages: wish list, approved work and funded work. The wish list would be the total pipeline at budget preparation time, which would be the sum of all ideas, project requests and projects. A filtering and screening process would then reduce this wish list to an approved list, suitably categorized into portfolios, which would represent things the company must do (like keeping the lights on and regulatory projects) and would like to do (all other project requests and projects). Finally, based on the available IT budget, the approved work is reduced to funded work, which represents keeping the lights on plus projects which will actually be done.

Without a demand pipeline, the annual planning process essentially takes the form of a frantic organizational scramble over a 1–2 month period (the greater the sums involved, the less time you are given!) as people rush to put some numbers together so that they can 'turn in their projects for next year' (one CIO at a mobile operator uses the term 'project tsunamis' to describe this phenomenon). In such an environment, the chances are high that investment planning will follow a subjective project-by-project approach, ...

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