It’s that time of the year again when companies have to put their thinking caps on and decide on an operating plan for the following year. It is not easy to anticipate the costs and projects for an entire year. With the constantly evolving business landscape and the rapidly changing technology environment, it is a challenging task to budget and envision the next 12 months. However, it is not impossible to set up a roadmap for the future in order to give the company a clear direction. Here is how leading companies can prepare your budgets, technology, and of course, your employees for 2018.
The management should have a clear idea of the objectives that the company should achieve in the coming year. This step is important to prioritize the unending number of tasks that lay in front of the organization. Without a proper vision, an organization can be in a real pickle despite a great team of employees and a good customer base.
The organization should not only create a clear set of strategic and tactical objectives for the company in a year, but should also communicate it throughout the organization. This clarity will bring everyone in the company in sync with the goals of the organization as a whole.
Each of the projects that needs to be undertaken by the organization in the coming year should be allocated capital, technology, and human resources necessary to complete them. Are the managers and subject matter experts in the organization capable of completing the project, or are they overloaded? Should new talent be hired? These questions will allow you to get the wheels rolling for a recruitment drive well in advance. Of course, the intake can be tweaked as and when the project requirements change.
If you need more flexibility, you can choose contractors over full time employees. This may be a more expensive option, but it will give you the freedom to get an expert when the project demands and eliminate the fixed costs related to an FTE.
You also have to budget for any kinds of consulting services or expert advisory services that you may need for any of the projects.
As a growing and leading company, you should be at the cutting edge of technology. Any kind of security concern or downtime on your end will only lead to loss of clients. So, technology upgrades should be one of the primary items in your 2018 plan.
You will have to research about the emerging technologies in your field or the kind of software your competitors are using. You have to account for licenses, subscription fee, and of course, the support services. On the hardware side of things, you need to foresee the need for upgradation of servers, the network infrastructure, and its maintenance.
Considering all the costs involved in the projects that your company needs to undertake in the future, you should be able to draw a tentative budget for the IT department. However, given the dynamic business environment, ensure that you are not going for rigid budgets. Agile budgets are especially common in tech companies because of the kind of uncertainty they face. You have to take stock of your monthly and quarterly budgets, and make changes to them according to the changing macro environment. You should have enough flexibility to reallocate the resources into projects that offer higher ROI at the time. Agile budgets cannot work without agile managers and the agile operations. They should be prepared to identify the new challenges and be quick to adapt to them.
You should also make sure that as the budget allocations change, so do the performance metrics for the employees. Otherwise, you can have a real mess at your hand, especially in terms of employee turnover rate.
Agile budgeting is already well-practiced, and recommended to implement if you have not done so already.
Once you know the objectives for the year and have set aside enough resources to achieve them, you are still left with one significant aspect of the planning process – governance. You have to delegate the responsibility of monitoring to someone. It may seem like an extra expense to allocate extra resources for monitoring purposes, but they are absolutely necessary. A system should be in place to know if the projects have been implemented as desired, how much under or over the budget have you gone, and the reasons behind them.
This will build accountability in the system. Moreover, you will have comprehensive data which you can use in the future. This will help you strengthen your strategies and weed out the problems in the current system. Such knowledge is precious. Consultants charge companies a fortune to build such accountabilities in a system. So, oversight is not an expense. It is actually an investment in the future of your company.
It is not easy to create roadmaps and budgets to support them in a disruptive industry. However, they are a vital part of every sustainable business’s operations. Planning helps you give shape to an idea, and also sets clear goals to your employees. This creates a sound system that can accommodate any kind of challenge that the business environment might throw at you.