Business Intelligence Applied: Implementing an Effective Information and Communications Technology Infrastructure

Budgeting Technology Expenditures

Note

From a practical standpoint, the ICT function of any organization needs to know how to budget its resources. In this section, we cover some guidelines that should be adapted to your organization. Every organization is different; therefore, it is not possible or even desirable to give an absolute distribution of resources. This section provides recommendations for the average organization.

A concept related to the technology S-curve is the technology trend curve. While the technology S-curve compares the resources and effort put into a technology with the way it performs, the technology trend curve is helpful “in providing guidance to the nature and extent of the various technology projects that a high-technology company should invest in. In other words, it presents a simple way of examining the portfolio of technology investments to provide a quick pulse of the company.”⁹

When a value-based management approach to technology projects is being considered, the trend curve is a useful tool. It shows three categories of technology (trailing-edge, leading-edge, and bleeding-edge) and looks similar to Exhibit 2.10. Each organization would invest in technology within the recommended percentages; therefore each organization's technology trend curve will look different. The technology trend curve can give organizations some guidelines on how to allocate their investment in technology.

Exhibit 2.10 Technology Trend Curve

The three categories ...