Cost Cutting in IT : When to Use Zero-Based Budgeting

Abstract

By requiring business unit managers to annually affirm, in writing, all new and recurring IT spending for their respective areas, CIOs will expand IT-spending accountability more effectively among IT, the business unit and the CFO. Key Findings • Clients admit that there is often detachment between business unit managers and their awareness of one-time costs involved in implementing the IT projects they request. • Clients also state that business unit managers are unaware of the annual recurring costs that will be incurred once their projects are in and working. • Most clients do not use zero-based budgeting principles to annually justify prevailing IT spending levels.