Do you have a structured process for yearly IT budgeting?

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My responsibilities for requesting and forecasting resources are primarily people-oriented. We're doing growth analysis and what we have people-wise in different geographies is a bit less important with remote work. In our budgeting process, we submit the Professional Services Group. I take input from all the other partners and managers; we roll up a number of people and have a plan by region, practice, specialty area, etc. The number of people we think we need to hire and that staffing forecast has to balance against the sales forecast and that's how it's presented to our president, finance team and so on.

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It's funny because as large of a company as you may be, some of the ways that we forecast the numbers—that go up through corporate and get published to now be part of the stock, etc.—are quite interesting because a lot of it is just painting what we think we're going to do in broad strokes. Our fiscal year goes from February to February, which is really strange; two months into the new year, I am already in FY ‘23, so that makes the planning a bit weird.

There are certain things that my organization is looking to build into our portfolio of offerings—like AIOps—so we look at what we hope to accomplish each fiscal year in order to say, "By this fiscal year, we're going to be able to offer this." We then went back into the headcount to determine the headcount we need in order to create that functionality and justify why we need that headcount from there. We're also a global company, so trying to understand where the market is going in which region also plays into the headcount requests. For example, I just requested a headcount for our Customer Engagement Manager in China, because VMware is trying to grow that market in the APAC region in general.

I don't have any resources there at the moment that can handle that workload. We align closely with the sales organization. If they're trying to break into that market, then I need to be prepared to offer support in that region. Approximately 70% of our business is US-based and there are cost considerations of course. We have a large presence in Costa Rica. Timezone-wise, it's very similar to the US and it's very cost effective, so a lot of our resources are funded from there. Those are some of our considerations when asking for headcount.

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I see a lot of mergers and acquisitions and the general budgeting process for an acquired company versus an acquiring company is often much different in how they allocate their resources and what they go through. From my experience they’re generally funded in two ways. The first is by writing the business case for someone or putting together your proposal of the projects that you'll do in the next fiscal year and then allocating a cost for each one of those components. And the other way that I've asked for money was through an innovation program if we didn't have our own type of innovation budget within my line of organization.

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Our process is to submit the headcount that we want and the cost range involved for each headcount. Then it goes to the upper-level, often directly to the CFO and CEO who then make a decision based on that. The metric that I use is the number of hours that I want allotted for building a platform and how it can improve the development process itself.

Do you have a structured process for yearly IT budgeting?

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