IT Budget Review SOP¶

Sub-procedure of budget-optimization-sop.md

Overview¶

Detailed procedure for conducting IT budget reviews that analyze current spending patterns, validate budget accuracy, and identify opportunities for reallocation to higher-value initiatives. This forms the foundation for cost optimization and strategic budget planning.

Scope¶

Parent SOP: Budget Optimization Pillar: Plan (Strategic Advisory) Service Area: IT Advisory

Prerequisites¶

Parent SOP requirements met (finance and IT leadership commitment)
Access to financial systems or budget reports (24+ months history)
Vendor contract inventory available
IT asset and license inventories accessible
Chart of accounts and cost center structure documented

Procedure¶

Step 1: Financial Data Collection¶

Request IT budget documentation (current and prior 2 years)
Obtain actual spending reports by category
Collect vendor invoices and statements
Gather credit card statements for SaaS/subscription spending
Document chart of accounts and cost center structure

Step 2: Spend Categorization¶

Map all spending to standard IT budget categories:
Infrastructure (cloud, hosting, hardware)
Software & Applications (licenses, SaaS, subscriptions)
Labor (staff, contractors, managed services)
Services (maintenance, support, professional services)
Telecom & Connectivity
End User Computing
Identify and categorize shadow IT spending
Reconcile spending to general ledger totals

Step 3: Trend Analysis¶

Calculate year-over-year changes by category
Identify spending spikes and anomalies
Analyze seasonal patterns
Project forward trends at current trajectory
Compare growth rates to business growth

Step 4: Benchmark Comparison¶

Gather industry benchmark data for comparable organizations
Calculate IT spending as percentage of revenue
Compare category allocations to benchmarks
Identify over/under-indexed spending areas
Document benchmark sources and methodology

Step 5: Variance Analysis¶

Compare budgeted vs. actual spending
Identify sources of variance (over/under budget)
Analyze accuracy of budget assumptions
Document recurring variance patterns
Assess budget process effectiveness

Step 6: Allocation Assessment¶

Evaluate run vs. grow vs. transform allocation
Assess strategic alignment of spending
Identify spending supporting business priorities
Document discretionary vs. non-discretionary costs
Calculate percentage supporting each business unit

Step 7: Reporting and Recommendations¶

Compile findings into budget review report
Create visualizations (charts, dashboards)
Develop recommendations for budget optimization
Prioritize reallocation opportunities
Present findings to finance and IT leadership

Deliverables¶

Deliverable	Format	Owner
IT Budget Review Report	Document (10-15 pages)	Lead Consultant
Spending Dashboard	Spreadsheet/BI Tool	Analyst
Trend Analysis Charts	Visual Report	Analyst
Benchmark Comparison	Spreadsheet	Lead Consultant
Reallocation Recommendations	Document	Lead Consultant

Quality Gates¶

All spending categories accounted for and reconciled
Data validated against general ledger totals
Benchmarks from credible sources and documented
Trends calculated correctly with appropriate time periods
Recommendations actionable and prioritized
Finance and IT leadership validated findings
Peer review completed

Last Updated: February 2026 Parent SOP: budget-optimization-sop.md