Most businesses have more growth opportunities and process improvements they could take advantage of than capital to invest in these projects. Failure to invest in proactive development doesn't hurt an organization in real costs – only in missed opportunities and competitive advantage.

To this end, Uncommon Solutions offers a Proactive Development Strategy which spreads development investments over time. A Proactive Development Budget is a planned monthly investment to incorporate growth and process improvements into an overall business strategy.

Management of a Proactive Development strategy is tied to our framework offering which includes working with our Business Analysts and Project Management in an Agile Development Environment to incorporate the best of Business Process Management into our client’s long-term strategies.

We categorize IT expenses into four categories:

• Infrastructure expenses – This is the maintenance and support of existing systems. It may include:
  • Upgrading outdated hardware and software
  • Patching newly found bugs and/or security vulnerabilities in software
  • Backing up data
  • Cleaning and/or purging data that has become corrupt or unnecessary
  • Training new users on existing software
  • Responding to day-to-day break/fix issues


• Base Software Maintenance is development work that is not entirely necessary.However, the impact on the business of pursuing an opportunity or mitigating a risk would far exceed the cost of performing these tasks:
  • Updating software to take advantage of new technological improvements.Good examples from the past include evolving applications to take advantage of new Operating Systems, increased internet bandwidth/speed, new features in Microsoft Office, the addition of an exchange server, or the cultural shift from fax to email.
  • Updating software or hardware to address changes in the business environment.Staff changes, vendor changes, business volume changes, government or industry changes, etc. yield significant needs to change your IT tools from time to time.

 

Every business has IT expenses in this category.However, fewer businesses plan for and expect these expenses.Generally, you can expect to spend somewhere between 15 and 35% of your original investment in technology annually in order to keep it functioning effectively.

 

• Proactive Development - This is budget allocated to new projects that are cost justified and will have a significant impact on optimizing the mission of the organization.It makes sense for an organization to maintain a master list of IT projects as they come to mind and to regularly revisit the list and prioritize it. This will prevent an organization from wasting IT resources working on good rather than great ideas and projects.In periods of growth, great organizations plan on constantly investing in their growth in order to encourage its continuation. During times of correction or contraction, this budget would be appropriately set at zero.

 

Proactive Development Budget is a planned monthly investment, and is entirely optional based on the business model, current prospects, and long term strategy.Failure to invest in proactive development does not hurt an organization in real costs – only opportunity costs.

 

• Capital/Project expenditures – Occasionally, a significant event such as a startup, a new division or line of business, a business boom, a merger or change of ownership, a significant government or industry change, etc. will warrant a significant investment in technology above and beyond any of the previous 3 categories.

One issue that must be monitored and considered upon budgeting at the Proactive Development or Capital/Project level is that every dollar spent at this level has an impact on the budget necessary at for Infrastructure expenses and base software maintenance. Most IT projects will increase the budget necessary those levels.

Thus, over time, organizations must be careful to select and prioritize at least some projects in Proactive Development and Capital/Project Expenditures. These expenses aim to decrease the costs of Infrastructure and Base Software Maintenance expenses. Examples of such projects might include server virtualization and/or consolidation, broad scale hardware updates, automation of IT inventory/ PC deployment / software deployment / group policies / etc.