Now’s the Time to Start Budgeting for 2026 IT Strategies

By W.B. King

While July is often associated with downtime, vacationing and sunshine daydreams, Info-Tech Research Group believes it is the month executives should “lay the foundation” for “transparent and defensible” IT budgets.

“Most organizations invest a lot of time and effort in a capital project selection process, tack a few percentage points onto last year’s OpEx [operational expenditure], do a round of trimming, and call it a day. However, if you want to improve IT financial transparency and get your business stakeholders and the CFO to see the true value of IT, you need to do more than this,” noted Info-Tech Research Group Principal Research Director Jennifer Perrier.

The London, Ontario, Canada-based technology research and advisory company serves over 30,000 IT professionals and bills itself as producing unbiased and relevant research aimed at helping CIOs and IT leaders make strategic, timely and well-informed decisions. In July, the company released its latest report, Create a Transparent and Defensible IT Budget—Build in approvability from the start.

“Your IT budget is more than a once-a-year administrative exercise. It’s an opportunity to educate, create partnerships, eliminate nasty surprises, and build trust,” Perrier noted. “The key to doing these things rests in offering a range of budget perspectives that engage and make sense to your stakeholders, as well as providing iron-clad rationales that tie directly to organizational objectives.”

Systematic and Repeatable Approach

According to the report, IT departments often struggle to get budgets approved due to “low transparency” and “failure to engage.” To get “unstuck,” the report suggested adhering to three principles:

1. IT and the business are fighting diverging forces. Technology has changed monumentally, while financial management hasn’t changed much at all.

2. Different stakeholders have different perspectives on your IT budget. Learn and acknowledge what’s important to them so that you can potentially deliver it.

3. Connecting the dots to clearly demonstrate IT’s value to the organization is the key to budgetary approval. But those connected dots don’t always result in a straight line.

Along with the noted principles, report authors also suggest that IT leaders need a

“systematic and repeatable approach” to budgeting that addresses the following criteria:

• Clearly illustrating the alignment between the IT budget and business objectives.

• Showing stakeholders the overall value that IT investment will bring them.

• Demonstrating where IT is already realizing efficiencies and economies of scale.

• Gaining consensus on the IT budget from all parties affected by it.

  
  

“CIOs need a straightforward way to convince approval-granting CFOs, CEOs, boards, and committees to spend money on IT to advance the organization’s strategies,” the report continued. “Forecasting and budgeting IT expenditures is a core capability with the broader discipline of planning and managing IT spending. Transparency is the essential condition for the effective practice of all IT financial management disciplines.”

Water Seeks its Own Level

To better prepare the 2026 budget, Info-Tech offers a five-pronged approach:

1. Lay your foundation.

2. Get into budget-starting position.

3. Develop your forecasts.

4. Build your proposed budget.

5. Create and deliver your budget presentation.  

   
   

“CIOs need a straightforward way to create and present an approval-ready IT budget that demonstrates the value IT is delivering to the business and speaks directly to different stakeholder priorities,” the report stated.

Mark Roman, managing partner and executive services at Info-Tech, said a budget isn’t like a horse and cart, because you can’t get in front of it or behind it. Rather, a budget is more like a river.

“When developing an annual budget, you have a good idea of what the OpEx will be – last year’s with an annual bump. You know what that boat is like and if the river can handle it. But sometimes you want to float bigger boats, like capital projects. But these boats don’t start at the same place at the same time. Some are full of holes. And does your river even have the capacity to handle a boat of that size?” Roman posited.

“Some organizations force project charters by a certain date and only these are included in the following year’s budget. The project doesn’t start until 8-12 months later and the charter goes stale. The river just can’t float all these boats. It’s a failed model,” he continued. “You have to have a great governance processes and clear prioritization so that you can dynamically approve and get boats on the river throughout the year.