ICT Management > Budgeting and Funding

Allocating funds for ICT

By Lasa Information Systems Team

When funding ICT remember to look beyond the cost of hardware and software and include maintenance and training costs too.

When calculating the cost of IT always remember that it is not just the cost of the software and hardware that has to be taken into account. You should always take into account the Total Cost of Ownership (TCO).

At one busy advice centre, workers complained -

"Our new database isn't saving us the time and money promised at all!"

The manager went on to explain:

“We bought a new database to help us manage our cases and report on the work we do more easily. The improved features also meant that we now had the potential to access the database remotely over the internet, which would enable us to expand our outreach sessions. We had only budgeted for the cost of the software itself.

We hadn’t factored in that a lot of the places we did our outreach didn’t have internet access so we would have an ongoing monthly cost for a mobile broadband plan.

We also hadn’t considered the cost of training key existing and new staff to use the database – particularly its reporting features to create reports to meet our needs.

The database was perfectly capable of doing what we wanted but because workers didn’t understand how to use it properly, we still had problems with the data that was being entered into the system. Since we hadn’t taken out a support contract we weren’t able to get any user or technical support when we needed it.

In the end, a lot of staff time was still spent compiling reports by hand, cleaning up data that had been badly entered into the system, and rekeying data that had been lost when there were technical problems with our network that caused the database to crash… – and time is after all money!

With hindsight, although at the time it seemed like an extra cost we couldn’t afford, we would have done well to spend money on a couple of wireless broadband dongles, a mobile broadband plan, training, and consultancy to help us set up the database to meet our needs, and a suitable backup solution so we could easily restore data if needed.

Although the new database could have saved us more time and money, and helped us to deliver our services better, and to more people, its potential wasn’t fully realised initially because we hadn’t budgeted properly for the total costs.”

Most of the expenditure on ICT is needed for things other than hardware and software.An easy equation to follow is the 70/30 ratio. That is, 70% of the expenditure is needed for:

• Training
• Ongoing IT support
• Connectivity - connecting equipment so that it works effectively
• Ongoing software licensing
• Maintenance contracts for equipment and any necessary configuration
• Backup arrangements

The smallest proportion – the remaining 30% is for hardware, software and peripherals.

For more information see the Techsoup article Technology Budgeting Basics, Westchester Not for Profit Technology Council article on Technology Planning, and Your non profit needs a Technology Plan by Monte Enbysk.