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A recent report published by the Research &Advisory Services division of Computer Sciences Corporation (CSC) lays out a new budgetary landscape for IT. It points out the dangers inherent in continuing to base financial planning around an outdated split between applications and infrastructure and states that there has been a change in what is valued by the business. Instead of two budget categories - that is, applications and infrastructure - there are now four: business change, business plumbing, generic services and appliances (see accompanying schematic).

To use the new IT-business landscape framework as a structure to plan a budget for the coming financial year, it must be populated with the things that need to be done, both new initiatives and ongoing work that needs to be carried forward. Take nothing for granted: by re-examining the costs of generic items rather than just carrying them forward, you may make savings year over year.

Figure out how much you feel your organisation should be spending in each quadrant of the framework, and then check that your bottom-up budget calculations are close to your aspirations. This helps avoid the common mistake of preserving sacred cows at the expense of important new business initiatives.

The 'right' proportions to spend in each area of the framework vary from company to company, but most organisations should probably be trying to raise the proportion of the budget that is spent in the top half of the framework, where the value of what you do is most likely to be perceived by the business.

• Don't rely on return on investment (ROI) for project justification.
  It is difficult to avoid using tools such as ROI and similar analyses. They are an important part of the governance of corporate investment, widely used in most major corporations. Nonetheless, remember that they are only tools, valuable as a decision aid but dangerous if they become essential to funding approval.
• Make the case for investment in new business plumbing and manage the old to make more funds available.
  The business plumbing quadrant covers two very different kinds of spending: one requires slimming down and one needs to grow. The 'old' business plumbing comprises legacy applications and packages-stuff that has been around for so long that it is taken for granted. Too often, its continued existence and costs are also taken for granted. It is crucial to free up funds by reducing the cost of this old business plumbing: pension off what's no longer of value, slaughter the sacred cows and reduce support for what's left to the bare minimum.
  Use the money freed up to ensure adequate investment in the new business plumbing, building an architecture that can take advantage of business process management language (BPML), web services and related technologies to provide the flexibility and agility that your business needs, whether or not the need is acknowledged today.
• Drive down the costs of generic services.
  Although you have probably taken pains to drive down the costs of generic technology every year, Moore's Law and changes in the marketplace continue to increase what it is possible to do for a given amount of money. Consider and keep reconsidering options for outsourcing, offshore outsourcing and so forth. Consider ways in which capital costs can become revenue costs. And, if there are facilities that you can't do without, consider whether you can share with someone else who has a similar need.
• Persuade the business to work with you to maximize value of appliances.
  The appliances quadrant is the newest and, consequently, the least well understood, but do not shy away from it or try to exert strong control over it. Accept that appliances will be bought [by staff or departments] and that there will be costs over and above the initial purchase price. Work with the business to figure out how best to contain the costs-for example, through lists of preferred items. Also work with the business to maximise the value of what business people purchase, helping them find opportunities to exploit generic gizmos in ways that are specific to your business. This is one of the ways to underline how IT can drive business value.