IT decision makers are responsible for managing two kinds of budgets: capital budgets and operating budgets. The right combination of IT spending across these two budgets will improve IT/business alignment and increase IT business value.
What Is the Capital Budget?
Capital IT budgets present plans for the acquisition (or disposal) of IT assets that will deliver benefits to the company over a long period of time (typically two to five years). They are listed on the company's balance sheet and depreciated over the asset's useful life. For a majority of small- to mid-sized enterprise (SME) IT departments, capital budgets include desktop hardware, enterprise applications, network hardware, and servers.
What Is the Operating Budget?
Operating IT budgets present the costs involved in running the IT department on a day-to-day basis. Items in the operation budget deliver short-term benefits (less...