Including Digital in Your Budget Process- Part 1 of 2
Just as the timeless holiday song says, it’s the most wonderful time of the year– budget season! Every year at this time, financial institutions are planning their budget for the upcoming year. If you are part of the budget approval team, not only do you need to make sure you work on your “maybe next year” response, but you’ll also make sure you are accounting for at least a 5% increase from your vendors, along with additional staff, capital improvement projects, and training and development. Don’t forget about including digital into your overall strategy and budget process.
There is a lot to consider when budgeting overall, but when you add digital to your process, it becomes more complex. We’ll break down best practices as you plan in this two-part blog series. In this first blog, we’ll help define what is included for digital, and how to help you better identify what to account for in your budget to support your strategic goals through digital investments.
Digital- No Longer a Nice to Have
Traditionally you may have considered digital a cost center, as it’s historically been a “nice to have” but not a “need to have.” It is no longer an optional consideration in our industry today. Digital solutions provide an opportunity to save money in the long term with the right plan and frame of mind. Sure, there will be implementation fees, hardware costs, software licensing fees, and time by your staff to stand up these solutions, but after that you may be surprised by the value digital brings your institution and your customers or members. Recognize that digital doesn’t exclusively mean a new piece of software, it may simply involve enhancing your existing systems and processes with low-cost, built-in digital enhancements that just need to be configured.
Develop a Data Strategy to Identify your Digital Needs
If you don’t have a data strategy in place, that would be an appropriate place to start. Data helps define your digital strategy, justify the need, and prioritize your projects. The ultimate goal when proposing digital budget items is to align with your overall institution strategy to supplement and improve your likelihood of meeting your targets. Digital might be 20% of the overall cost of a project and not standing on its own. It shouldn’t be a separate bucket within your institution to fund and manage.
What’s Next?
In part two of this blog series, we’ll focus on creating and communicating your digital journey with your entire organization through a Digital, IT, & Cybersecurity Plan and how that will help identify and prioritize when the timing is right to commit resources, including budget dollars to digital solutions.
How Can We Help?
Let us know how we can help you in defining your data strategy and digital journey by commenting below or reaching out to us directly. We have upcoming webinars around data on August 8, 2023- Data Analytics: Crawl, Walk, Run — Walk: An Introduction to Data Warehouses : 2023 : Events : CLA (CliftonLarsonAllen) (claconnect.com) and September 14, 2023 Structuring Your Digital Journey : 2023 : Events : CLA (CliftonLarsonAllen) (claconnect.com). If you can’t make these, live, go ahead and register and get the recordings and materials later. This process truly is a journey, and whether you find yourself in the crawl, walk, or run stage of your digital journey, at CLA, we’ll meet you where you are and help you get to where you want to go.
Tim has more than 20 years of experience in operations, IT, cybersecurity, and digital strategic planning, most recently serving as a CTO/COO for a community bank. With a focus on financial services clients, he works with banks and credit unions to recognize the importance of data and embracing digital solutions to improve organizational performance while meeting the preferences of customers and members alike.
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