Amended Riordan Manufacturing IT Budget
CMGT 578
Amended Riordan Manufacturing IT Budget
The executive board for Riordan has tasked Information Technology with reducing their overall budget by two percent, while providing an increase of four percent to hardware line item, software line item, and outside IT support services. There are many lines within the budget that can be cut immediately to provide the necessary budget cuts, but it is important to make sure that none of the services being provided to staff will suffer with the adjustment to the budget. This paper will discuss the current budget, the increased made to the requested line items and the overall budget decrease. The paper will also justify the changes made to the budget.
Current Budget
Riordan’s current IT budget consists of $1,567,750 being spent on salaries, benefits and bonuses. Another $333,500 is being spent on Operating costs. The total IT budget is $1,901,300. In order to meet the expected two percent decrease, IT will need to cut $38,026 from their budget. The hardware line item has a total budget of $8,500 and the four percent increase totals an additional $340. The software portion of the budget has a total of $45,000 when you include the line items for software licenses and maintenance. The four percent increase for this line item will cost Riordan an additional $1,800. The outside IT support services has a budget of $93,600 when you included the contracts and the leased lines line items. The increase for this portion of the budget totals $3,744. The total amount needed to increase each of the requested line items by four percent is $5,884.
Where to Cut Budget
After increasing the specified line items as requested by the executive board, the IT department is left with the need to cut nearly $39,000 to meet the two percent budget reduction. This would bring the total IT budget down from $1.91 million to 1.87 million. The first places to look for reductions are any...