Budgeting for technology requires careful planning, clear priorities, and hard decision-making. This guide will walk you through the key steps to creating an effective technology budget process for your municipality.
You Need a Tech Plan! Why?
Without a usable plan, you can’t manage your agency’s technology needs, resources, and risks. How you develop this plan depends on your specific circumstances, but it should balance spending, available time and effort, and competing priorities.
Are you concerned about what a plan should look like? Ask your tech expert or an AI chatbot to provide “an outline for a <size of agency> local government technology plan.”
Just starting now? Don’t worry—it’s better late than never. Here are some considerations for planning:
1. Have a Process
Your plan can be formal or informal, but it must ensure that risks and needs are managed effectively so that tech failures are avoided. Start by defining how the plan will be created, who is responsible for it, and when it should be completed. Whatever process you choose, it must work for your organization and staff. Involve governing body members from the beginning. This minimizes surprises and helps ensure consistent decisions over time. Next month we will talk about the public policy implications of tech.
2. Take Inventory and Set Goals
Next, take stock of the technology you have and what you want to achieve. Your tech team should maintain an inventory of hardware and software, understand existing gaps, and have a sense of future needs. It is important to know what technology tools should be owned, leased, or rented. Establish a schedule for replacing hardware and updating software licenses. Regularly evaluate if what you have meets public and user needs.
3. Understand Risks
Don’t forget to identify risks. Conduct periodic technology risk assessments that include and go beyond cybersecurity. This can be as simple as a scan of your environment. It is important to help you understand your broader organizational needs and support your decision-making. Your cyber insurance carrier may be able to help with this.
4. Analyze the Gaps
After understanding the risks, compare where you are to where you want to be. What can be done to mitigate these risks? Weigh the costs of time, money, and resources to address these gaps against the costs of not acting.
This should lead to plans for upgrading equipment, acquiring software, and providing staff training. Be sure the rationale behind the plan’s goals supports the organization’s big-picture needs and that they are clear to decision-makers.
Set Priorities and Make Decisions
With your plan, balance your needs and costs against urgency and plot priorities on a timeline. This can be challenging, as team members may have different opinions about what should be addressed first. To navigate this, set up a clear process for making decisions.
Decision-making can be simple or complex, depending on your agency’s needs, but it must result in recommendations for decision-makers. Senior management should decide who participates, keeping in mind that final decisions will be made during the budget process. Participants might include senior administration, finance management, technology advisors, governing body representatives, risk manager, and users (both citizens and staff members).
To keep discussions focused, consider key questions: What are our goals? How are needs distinguished from wants? What are the risks? What is affordable? Remember, regardless of other priorities, minimum cybersecurity standards must be met or exceeded if warranted.
Ideally, governing body members and executive management should provide clear technology policy goals, awareness of key issues, and an understanding of acceptable risks. This provides direction for creating a plan that can be implemented, with some expectation of funding, when budget decisions are made.
Priorities and examples could include policy goals (e.g., installing cameras in parks), user needs (e.g., digitizing applications), tech refreshes (e.g., replacing old laptops), or public expectations (e.g., live-streaming meetings).
Document your discussions; this will be especially useful if questions arise later. Stay open to making small improvements when needed. Planning and flexibility will help deliver better
technology services and prevent unnecessary struggles over time.
Seven Keys of Successful Tech Budgeting
Now that you have a plan and priorities, focus on the budgeting process itself.
Remember that there’s no single best approach to tech budgeting. Whether you use a departmental or centralized approach involving a committee or individuals, adapt these steps to work for your organization.
Align your technology planning with your organization’s budget cycle. Keep it simple and be prepared for changes at the end of the process.
Set budget limits early. Give your teams a sense of realistic financial constraints from the start so they can create a viable plan tied to priorities.
Clarify who pays for what. Decide which expenses are covered by central IT and which are handled by departments. This should be clear to prevent departments from buying incompatible technology and surprising IT with it. Surprising the tech team should never happen.
Account for cybersecurity. These costs often exceed expectations; at a minimum, tie the plan to what your cyber insurance policy requires. Focus on both employee awareness
and infrastructure protection. Today paying for cybersecurity and website management are non-optional services, just like utility and insurance costs.
Balance your funding sources. Many technology costs, like software and security subscriptions, now come from the operating budget. Look to use capital budget funds when possible.
Compare co-op purchasing contracts and consider any state government-supported services. Short-term leases for equipment can help when capital funds aren’t available. Discuss these options with your CFO to minimize their impact on budget and levy caps.
Consider funding technology through grants. When applying for grants, include appropriate tech needs. Technology can be the main reason for the grant or costs are recoverable as an administrative cost. (Remember, tech is everywhere today!).
Lastly, make sure decision-makers have a basic understanding of the technology they are being asked to fund. A full range of articles focused on these issues can be found here.
Make these habits a routine and review your tech plans every year.
