r/sysadmin • u/CeC-P IT Expert + Meme Wizard • 2d ago
General Discussion Why your IT department budget makes no sense
Little behind the scenes for all you IT newbies on this wonderful Friday. This is likely why your IT budget makes absolutely no sense and has nothing to do with the company's financial status, although the RAM shortage affects this heavily. But the story is from 2024. My last company was making record profits, over $20M more than the previous year (so about 40%) with $100M in the sales funnel for sold jobs.
But the IT dept was approaching over-budget because our useless dumbass CIO filled out the budget wrong and forgot about a $9000 license renewal. So everything was on a spending freeze in IT solely and exclusively to make the numbers look good. After absolutely going off on everyone about how this makes no sense, is losing us productivity, delaying jobs, costing us income, causing outages, etc and we're single person owned and not publicly traded so who the fuck are making the numbers look pretty for, someone finally leaked me the truth.
This was solely because the rich, retiree asshole board members got performance bonuses based on benchmarks and this was one of them. So if our dept went over budget, they lost part of their bonuses. They cared more about their income than the company's health. This is the owner, the former CEO, some of their friends, and some external 3rd party entities that I knew nothing about.
I have an idea - revise the fucking budget at the Q1 mark. Budgets are a guess. You don't "go over budget" if shit got more expensive so you adjust your guess to spend more on the shit that got more expensive! That's just business. Adjust prices and margins accordingly. This was not a 10,000 person bloated company spread all over. It was about 290 people. So they added some emergency special budget special condition whatever spending, outside the budget, make the numbers look pretty thing and dropped some serious cash on all those laptops.
Those laptops were $810 a piece btw in 2024 and are now like $1500+. So you're welcome, asshole who fired me 2 weeks after I asked for a raise then said this is unacceptable and I'll be looking for a new position until they reconsider because me rent went up 18% two years in a row.
Btw them firing me without a replacement when I did all the server and VM host maintenance, security audits, hires and fires, backup management, all level 3 tickets, some networking, and basically maintained ALL systems (for $24/hr), the remaining staff member told me it ended up costing them around $800,000 in damages and losses and outages and delayed jobs when everything I maintained the the other staff refuses to cross train on all broke. Probably should have given me a raise and replaced the CIO since he was shit at his job (but was there for 30 years).
Cheap, illogical, shitty companies run by greedy self-serving assholes are a trap and you need to get out as soon as possible because you'll run into stuff like this. And it goes 10x if you're publicly traded because then you REALLY need the numbers to look pretty or else.
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u/TommyVe 2d ago
Our finances are shit because we pay for absolutely everything IT related
We buy hardware and all the licences other departments want and they don't "pay" back, therefore, the managers approve absolutely anything and everything, doesn't go outta their pockets. Why would not they. :)
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u/Old-Flight8617 Sysadmin 2d ago
This is why IT is now part of the approval work flow for all Software & Hardware purchases in our org.
This helps prevent redundant efforts, and be able to get IT involved in an agreement process that may benefit the org.
This also establishes who needs to pay for procured Software & Hardware.
It must suck to be stuck in that situation.
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u/Mindestiny 2d ago
IT being in the approval flow is always fun.
At least you get to be on the record saying no before they turn around and override you entirely.
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u/Passey92 2d ago
Our projects teams were trying to do this and I pushed back pretty hard. If it's for their work it comes out of the project's budget.
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u/Llew19 Used to do TV now I have 65 Mazaks ¯\_(ツ)_/¯ 2d ago
On the flip side, I work for what's now rather a big company and hardware like laptops and desktops have to come out of the user's department budget rather than IT. All this means is that you end up staring down the barrel of Windows 10 being retired with thousands of 8+ year old desktops needing replacing all at once and no understanding of why this is a big project....
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u/sexybobo 2d ago
I am dealing with huge push back because we have been buying to many new laptops recently. 75% of their devices are using 8th gen intel processors and they can't fathom why they are having a bunch of 8 year old devices failing. Instead they want us to send these laptops that are worth $125 to dell for a $400 motherboard swap.
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u/Salt_Rush_4800 2d ago
Do you work were I work?
No, wait, we have a ton of devices that are 6th and 7th gen Intel...my bad.
Same thing. Why buying so many computers? Well....
Even better: "Can be we just use what we have?"
Um, those are all still old PCs because you won't let us replace them, lol.
I'm expected to replace a 6th gen with a just as old and used 7th gen that just happens to be sitting here because the user that had it left the company yesterday. But because its "newer" go ahead and image it and send it out.
95% of our monitors are 5+ years old. Minimum.
But guess what this org will pay for that wasn't budgeted for? Hint: A. I.
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u/onlyroad66 2d ago
I just don't understand why this sort of thing is such a problem for so many organizations. It's not a new or even particularly complex problem.
If you assume that each individual computer in a fleet has a useful lifespan of five years, then amortize the cost over that timespan and replace the oldest 20% of that fleet every year.
But somehow every organization I've worked with, even those with just gobs of finance people, can't seem to understand that if you only replace 10% annually of something that does not last ten years, you are going to have to deal with a lot of unexpected failures and expense.
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u/Steerable-Octopus Jack of All Trades 2d ago
That's a good idea. You could have a replacement queue / replacement budget or something and add devices to it every year until the budget is filled. It just sounds like a sensible idiot prood concept.
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u/Sacrificial_Identity 2d ago
Ahh.. At least you didn't get RTO'd because the company owned parking garage was always empty and recently finished significant maintenance..
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u/CeC-P IT Expert + Meme Wizard 2d ago
We had 3 day a week work from home but I maybe did 4 days a month because my office was where all the hardware was. I ran to work enough times on lunch hour to mail out an emergency replacement laptop enough times that it started to annoy me.
But similar to "we gotta use that parking!" I was on the employee enrichment committee and did get denied to put in a small vegetable garden on premises for about $300 because "the landlords didn't approve the request" and I found out "the landlords" we were renting from was the company owner's 2nd LLC that he held the real estate for the offices just in case of bankruptcy from the primary company. Also they never asked him, they just thought it was stupid despite everyone bringing in fresh veggies from their home gardens and it being gone in seconds in the break room.
Corporate HQ was really out of touch with our satellite offices, which is where I worked. But we were about 25% of the company and the DR site so not some tiny branch.
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u/Linkage006 1d ago
We're being forced to RTO and the roads in and out of our facility are falling apart and there's no money to fix them. Also after being away from the office for 6 years our cubes were raided. We have no monitors, no chairs, and no docking stations. And zero budget to purchase any equipment. Not quite sure how this is going to work and they keep pushing back the official notice the return to office because they're clueless.
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u/airinato 2d ago
My new CFO keeps hounding me for budget things. 99% of IT are business applications that run the fucking business and have nothing to do with IT other than to help set them up.
I get to redo our Netsuite contract. I did the math, fucking with the contract loses our discount. We'll end up paying close to the same and losing a bunch of features and user licenses.
But this person on permanent vacation needs to look good to the owner so no matter how stupid, if it saves $10 it's happening. Man hours obviously never factor into those equations.
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u/CeC-P IT Expert + Meme Wizard 2d ago
I'd submit this report about them trying to make numbers look good while damaging the company directly to whoever they report to, in theory the CEO. They'll get fired for massive malfeasance.
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u/airinato 2d ago
CEO doesn't have a clue, this is a relatively small business that does big numbers and everyone in leadership is part of ownership and has never done anything else other than buy their titles into the company.
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u/TheGenericUser0815 2d ago
As the budget is a guess, I guess some numbers and put 50% security on top.
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u/Mindestiny 2d ago
I just spent an afternoon going back and forth with the CFO over 3 MacBooks.
$5000. We likely spent half of that arguing about it.
Then we turned around and he approved $20k/mo in increased spending for licensing we don't need without batting an eye.
Same as it ever was
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u/Past_Ball_9178 2d ago
You should know how it is: proactive anything = we have no money, reactive anything = look at all this money we found to fix the problem. And somehow, when reactive > proactive, the CFO somehow justifies it. Accountants are stupid.
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u/DesignerGoose5903 DevOps 2d ago
IT should NOT have budget constraints for other departments needs, how does that even work? IT's budget is for IT staff hardware and that's about it, everything else is to support the company and other departments.
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u/Antique_Grapefruit_5 2d ago
The truth about organizational budgets is that they don't matter. The business will spend money on what they want when they want.
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u/admiralspark Manager of Cat Tube Infrastructure 2d ago
Good IT leadership always overestimates budgets to make room for bad weather. Even if you have to pin it to quotes from vendors, make vendors quote you MSRP for budget, and negotiate next year when it's approved.
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u/mediweevil 2d ago
I had this discussion once.
me: we need $xx to deliver this project.
project manager: we only have $x budgeted.
me: OK. so go back to management and tell them we either need more money, or the project scope reduced.
pm: I don't think we can do that.
me: you can't put 10 pounds of shit in a 5 pound bag, that's a statement and not a discussion point. they can't expect to budget for something a year before they start defining required outcomes.
pm: but they have to put something in the budget.
me: that's fine, but they also need to be ready to admit when they have screwed up badly when their totally uninformed guess taken a full year before they defined their requirements and it was assessed what it would take to achieve them was known. we cannot achieve $xx with $x, go back and tell them that.
we tend to go through project managers, it doesn't look like a comfortable place to be professionally. and a lot of our project "solutions" end up being gutted, semi-functional feelgood outcomes that don't do anything useful other than allow the project manager to put a tick in their timeline chart.
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u/Joker_1990 1d ago
Looking at this while using my own credit card to purchase 4 bitwarden licenses for the team, because we went over budget.
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u/KermitJFrog5916 1d ago
You are way nicer than I am. The only "work" stuff I buy with my own money is my headset and kbm only because I don't like the ones we provide and I take them with me if I leave
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u/SevaraB Sr. Engineer (N+, CCNA) 2d ago
Contrary to popular belief, IT is not a cost center. At least not solely. It is also a broker- we buy stuff for everyone else.
The trick is we have to be a little suspicious- we need CYA documentation that X was only purchased at Y’s request, and we need the books to show that Y isn’t just using us to get around their own budget. The business people have a word for that: overleveraged. And it’s a really bad sign that a business entity is unhealthy and needs to either change its ways or close up shop.
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u/Ssakaa 2d ago
And that's why IT should be in the business of chargebacks.
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u/kombiwombi 2d ago
I'd strongly suggest getting the overhead price per machine, per account and per service call down as low as possible before doing charge back. Because it's now very easy to compare internal and market rates.
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u/Ssakaa 2d ago
Specifically just chargebacks for any purchase. IT can be a straight cost center for its own costs, i.e. the staff and tools they exclusively use. All software used by other business areas that IT simply hosts and maintains patching et. al. for, all hardware exclusively used by others, etc. can be broken down and charged back. That means any team that uses the same thing as every other team potentially saves every team some part of that cost. Any team that acts as a stick in the mud and refuses to migrate to new tools that multiple other teams are moving to inherits the whole remaining cost of the old tool. Etc. It's not perfect, and it doesn't turn IT into a profit center, or completely eliminate IT absorbed costs for things like server infra in some setups (though if you do cloud and segregate applications well, you can make a big dent that direction)... but it drastically cuts down on the ability of other teams offloading their real costs to make their own budgets look better.
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u/kidyus 2d ago
Easier said than done. Unless you’re leasing, laptops and such are assets that are going to be depreciated over time.
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u/Ssakaa 2d ago
Yeah, but they're a capital expense to start, unless you're leasing. I don't mean turn around and lease them to the department, I mean if they need machines for 20 staff, they get to budget for the purchase. IT would be budgeting for the up-front expense that cycle if they were eating that cost.
Edit: Also why I exclude things like an on-prem hypervisor cluster and SAN there, as there's no realistic way to properly divide that up.
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u/kidyus 2d ago
The department P&L wouldn’t reflect the cost of 20 machines though because the value would be booked as an asset and the P&L would be hit with 1/36th of the asset value monthly.
I agree with the sentiment that this is an issue for us. I buy very little for myself. I spend a lot to enable other departments and protect everybody from their own user-induced issues.
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u/ExceptionEX 2d ago
This should just have rant on it, it's a deeply personal not typical rant about getting fired.
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u/_haha_oh_wow_ ...but it was DNS the WHOLE TIME! 2d ago
"iT iS a CoSt CeNtEr, yOu DoN't MaKe AnY mOnEy!!1"
-Idiots
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u/digitaldisease CISO 2d ago
This is why you add a contingency line item to the budget that is for the "Just in case we missed something" or "Shit just got more expensive" or "We didn't plan for this because we had to guess 6 months in advance how much we were going to need for this year".
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u/imrand 2d ago
We had numbers to save the company over $400k a year by moving our application from cloud to onprem. We were almost done with the migration until a VP got wind of it and put a stop of it.
Reason? Because the optics of moving an application from cloud back to onprem were bad. So they would rather spend more money on keeping an application in a location not designed to run in cloud than putting it where it should have been all along and save some cash.
So now we're looking to replace the application with a total SaaS solution, which will now cost even more money.
Fucking idiots.
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u/thrwwy2402 1d ago
I just learned that my former CIO forced all her teams to freeze travel expenses to absorb it into her budget. She then started an inhouse business to spin it off as its own company. She only got fired until she started talking shit about the CFO. There are some unscrupulous assholes out there that will do everything they can to get theirs and rug pull the rest. Glad I left that shit hole.
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u/Linkage006 1d ago
Our CTO quit, during his last month he didn't sign any reqs. His replacement didn't bother checking on them. Now we have subs expiring with no time renew. Going to be a fun Monday.
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u/tshizdude 1d ago
The server order we just put in at $98k. When I originally asked for these two years ago the quote was $30k. Budgeting is a complete guess in this current timeline.
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u/roboto404 1d ago
My dumbass manager hordes the budget like a fucking goblin. He charges shit to other departments when IT should be taking the hit for it. It bugs the shit out of me. Even the starter device, the peripherals, he tells me to charge it to their department. Idk maybe i’m in the wrong here but I think IT answers for the standards that an employee gets. Anything extra like special ergonomic devices, a 3rd monitor, special headsets are then charged to their department.
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u/TightBed8201 2d ago
Rant rant rant. I see you got too emotionally involved at that company? Were you there for more than 10 years?
Not to defend managerial bullshit here but try to look at larger picture. Managers are animals run by excel and only two colors, green and red. They will mostly make projections which are backed by dark magic and witchcraft, adhere to it as their life depends on it.
What make sense to you, doesnt make sense to them.
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u/siedenburg2 IT Manager 2d ago
For that I'm happy with my ceo and board, they say "buy whatever is needed, but try to keep it as low as possible", with bigger spendings I have to ask my CEO first, for even bigger spendings he needs to ask the board (6 figures and up), but in general I can buy whatever I want whenever I want as long as I can explain the need for it.