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Network organizations are working to complete their 2009 budget process. The typical budget categories, including staff salaries, costs of telecom services, and corporate overhead allocations are easy to identify. However, attention must also be focused on several other seemingly, less critical areas that will definitely increase in importance.
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This article was originally published by Info-Tech Research Group. Copyright (c) 1998-2008 Info-Tech Research Group. All rights reserved. Reprinted by permission.
Preparing an accurate 2009 network budget is challenging because of the dynamic nature of the services it must support. Moreover, regardless of changing technology and more stringent business unit requirements, network organizations are still expected to deliver and support quality services.
As a result, the following budget categories, which are sometimes considered as discretionary, or of lower importance, must be considered:
- Staff training and education expenses.
- Business unit support costs.
- Ongoing performance management requirements.
Many enterprises simply allocate a discretionary sum of money to support the above categories based on gut instinct or past experiences. However, a lack of focus and insufficient funding in these areas could generate serious network issues in 2009.
Typical network cost categories, such as salaries and cost of services, are easy to identify and validate when compared to other categories considered less important. Likewise, many organizations do not allocate the required time or effort to accurately identify this lower-priority, cost area.
However, times have changed and the budget categories discussed in this research note should be assigned a higher priority in 2009. There are various reasons for this recommendation including: the complexity of new technologies and services; business unit demands for more stringent service levels; and increased training requirements for network staff to perform their jobs.
Enterprise network environments continue to become more dynamic and complex as business requirements change and new services are introduced. Network executives are discovering that providing the appropriate mix of quality services and support requires a more focused approach on annual budget needs and costs. More intuitive and effective performance management tools, increased staff skill levels, and support activities that provide improved alignment with business units require careful consideration.
Although a crystal ball will not help, budget planners must still anticipate a myriad of situations, especially changing business unit requirements, which could impact the network budget's bottom line and the services it funds. As a result, network organizations should pay special attention to the following items when preparing 2009 budgets.
Training & Education Expenses
Numerous network organizations easily spend $100K or more to maintain a high skill level among their staff. While some training is included in many budgets, it may not be considered as a primary category that mandates closer scrutiny. At times, this is the first item that takes a hit when expenses must be reduced. However, network technologies and the services they support will continue to increase in complexity. Without proper training; it is extremely difficult to deliver and maintain the requisite service levels. Consider the following points when preparing this section of the budget:
- Annual staff fluctuations. There will likely be a mix of new hires, promotions, and departures that present training issues. While these events cannot always be accurately predicted, the associated time and costs to address the training needs for each of these scenarios should be included in the budget. For example, if VoIP is being introduced and two new hires will each require a week of vendor training, this should be included.
- The growing impact of mobility. Mobility will continue to provide its own set of challenges. It is difficult to support enterprise mobility needs that traverse both wired and wireless technology networks. Business unit clients could be using either technology at a given time depending upon their location. As a result, technical support needs must be revisited and appropriately funded to support this challenging requirement.
- The introduction of new services. Network changes are pervasive and continue to challenge network organizations as various types of wireless local area networks (WLANs) are being installed and existing wired solutions are being upgraded. Network architectures are being collapsed, expanded, or completely redesigned as business requirements change. Consequently, identifying suitable training needs and the required skill sets to support these changes is important.
- Discretionary cost estimates that are inaccurate. Technical training is not inexpensive and more accurate requirements must be identified and funded—including travel expenses. Most outside training costs can be identified and budgets should reflect this point. Also, when staff members are in training, their job responsibilities must be assumed by others. This could require significant overtime expenses or inter-department billing costs that must be considered.
Next: Business Unit Support Costs