Riordan Budget Reduction Analysis and Term Paper

Open, View, and/or
Download this Document

Total Length: 1218 words ( 4 double-spaced pages)

Total Sources: 1

Page 1 of 4



SaaS-based applications also need to be considered in the context of replacing the leased lines expense of $50,400 which escalates to $52,416 with the 4% increase in IT expenses as defined by the assumptions of this project. Deploying applications on a SaaS-based model has the potential to minimize or even replace the costs of leased line connections with suppliers, buyers, distribution channel partners including training partners. According to Computer Business Review Online (2006) the integration aspects of SaaS-based platforms including IBM OnDemand, Oracle OnDemand, Salesforce.com and others is progressing to the point of being able to manage order transaction workflows previously relegated to EDI connections. In trimming Special Projects down from $150,000 to the suggested level of $106,210 this specific budget item could be used for a SaaS Integration Pilot that would yield significant cost savings in the future.

Making the Budget More Realistic

Accomplishing the goals of increasing selected IT expenses by 4% while accomplishing a 2% reduction in the total budget can be accomplished, yet the flipside of the risk with this budget is overspending due to unrealistic expectations in the budget. The following are expenses that are uncharacteristically low given the size of the total IT operating budget. These expenses and their assumptions need to be re-evaluated to make them more realistic and in the process, less susceptible to a budget over-run:

Travel expenses at $22,000 a year is typically what a just one employee will spend with a 30% travel schedule. This is highly unrealistic for the entire department and would most assuredly lead to a negative budget variance due to over-spending. At $1,400 for entertainment the same logic holds. Both travel and entertainment are unrealistic as budget figures for a group of highly paid professionals and more like budget figures per individual per year.

Conferences at $3,750 for the year reflect what a single employee typically spends per year, assuming they attend three conferences.

Stuck Writing Your "Riordan Budget Reduction Analysis And" Term Paper?

View All Our Example Riordan Budget Reduction Analysis and Term Paper

Have A Custom Example Essay Written

As the foremost concern of IT directors, managers, and programmers is staying technologically current on their specialty, the figure stated in the budget is unrealistically low. At $1,500 this is again a budget figure that is more appropriate on a per employee basis per year.

In summary the entire series of assumptions on these expense categories need to be re-evaluated as they are more indicative of a per employee spending level than department wide. Keeping in mind that keeping technologically current is the most critical aspect of IT professionals' career concerns, the budget as it stands today is unrealistically low given the staffs' ongoing training and self-improvement needs.

Summary

Riordan Manufacturing has a budget that is very unbalanced and in need of major re-negotiation of software licensing, maintenance, and must re-evaluate their assumptions regarding employee-related expenses. Riordan needs to investigate the cost reductions possible in licensing using SaaS as an alternative integration and application platform. Ironically the escalating software licenses could be used to drastically reduce the total IT budget through the use of SaaS-based applications, integrated across a common platform. For Riordan the future must include the ability to gain greater negotiating leverage with their software providers and regain control of the largest IT expense categories. As the IT staff will be asked to make major changes to the processes by which they use to do their jobs, Salaries and wages, benefits, and bonuses should not be touched as enough change is on the way for them without modifying these expenses......

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Riordan Budget Reduction Analysis And" (2006, December 30) Retrieved May 5, 2024, from
https://www.aceyourpaper.com/essays/riordan-budget-reduction-analysis-40767

Latest MLA Format (8th edition)

Copy Reference
"Riordan Budget Reduction Analysis And" 30 December 2006. Web.5 May. 2024. <
https://www.aceyourpaper.com/essays/riordan-budget-reduction-analysis-40767>

Latest Chicago Format (16th edition)

Copy Reference
"Riordan Budget Reduction Analysis And", 30 December 2006, Accessed.5 May. 2024,
https://www.aceyourpaper.com/essays/riordan-budget-reduction-analysis-40767
   

Open, View, and/or
Download this Document
order custom essay example