3 strategies for successfully navigating the budget reduction process
This time of year, most school systems are in the middle of their budget processes. Unfortunately, dwindling school budgets and annual cost cutting, while still being expected to deliver top-quality educational opportunities for students, is a common theme across the country.
Technology department budgets are often among the highest in school systems and the most misunderstood. There are elements of the technology budget that are critical to not only the education but also to the business side of operating a school system. However, when it comes to cutting budgets, departments are simply given a percentage based on their budget.
A double whammy
Every technology budget has elements of voice and data, hardware, and software maintenance, which are associated with mission-critical service such as:
|Phone||Student information systems||Microsoft|
|Network equipment||Storage||Enterprise software licensing|
|Firewall||Disaster recovery||Monitoring tools|
|Virus protection||Desktops/laptops/tablets||Off-site data centers|
Typically, these budgets increase 15 to 20 percent annually. If these maintenance services were to be reduced or eliminated, the school system would have an increased level of risk for safety, reliability, scalability and support. It’s a double whammy for technology leaders.
First, they must justify an increase to maintenance areas in a climate of budget reduction. Second, technology leaders are asked to absorb the budget increase, which means the actual technology budget reduction is higher for all other areas in the department.
School systems have a budget category called “fixed cost” or “cost of doing business.” This category includes expenditures such as bus fuel, electricity and insurance. These expenditures typically increase every year and are not included in any reduction calculations. My strategy has been to work with the superintendent and the chief financial officer to identify the mission-critical technology maintenance expenditures and move them into the fixed cost category. Removing these maintenance expenditures will lower the overall technology department budget, thus lowering the budget reduction calculation.
More with less
As a technology division leader, pay close attention to other department cuts.Other department cuts can’t be performed in a vacuum because they could have a dramatic impact on your staff and existing levels of service. Understanding what roles or services are being reduced or eliminated is very important.
Often, a function is not reduced or eliminated, just the role supporting it or the services it provides. If there are technology elements to the role or service, it is often assumed that the technology division can absorb the other department reductions. Remember, your division will be absorbing cuts in staff, services or tools, which means as the leader, you will be asking fewer people to do more with less.
Being able to work with your peers early in the budget process will enable leaders to have a much clearer understanding of reduction recommendations their consequences. The next conversation should be about the abandonment of functions and services, but that is another topic for another day.
What’s the impact?
When it comes to reducing a technology budget, the focus should always be on the current service level agreements being provided to the organization and the stability of the infrastructure. As you begin to identify cuts, provide corresponding impact statements that are articulated in verbiage that is relevant to your peers, the superintendent and the school board.
As the technology leader, these impact statements allow you to clearly articulate the consequences of the recommended reductions, to revise the service level agreements for the upcoming year, and to highlight any increased risks to the infrastructure.
We all know that after two months, everyone forgets what is said during the budget process. However, when issues arise during the school year or your superintendent starts to hear complaints about technology service, these impact statements can serve as documented references highlighting the budget reductions and consequences. It boils down to expectation management for leaders and staff.
After 16 years of handling school budgets and being asked to reduce them, the strategies highlighted here have served me well. I hope they help you.
Lenny Schad, one of the most prominent voices in K12 technology leadership, is District Administration’s chief information and innovation officer.