Save 5 to 9% of IT Spending By Zero Based Budgeting

December 21, 2009 · Filed Under Thoughts  - 0 Comment(s)

According to a survey by CFO magazine , IT organizations can save 5 to 9%  of their budgets by starting their budget from scratch (zero-based budgeting) rather than just revising last year’s budget

The CIO Executive Board created a model of best budgeting practices, based on a survey of 200 of its member IT executives about their budget planning for this year. It then compared the model with practices employed by companies at the other end of the efficiency spectrum to determine potential savings.

The group estimated that some companies wasted 5% to 9% of their 2009 IT spending in missed cost-cutting opportunities, largely by revising the previous year’s budget rather than starting from scratch with a zero-based budget. Freshly scrutinizing every line item tends to unearth significant savings, says Andrew Horne, senior research director for the CIO Executive Board.

The article also identified significant cost savings by ensuring that IT is aligned with the business objectives.


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