Two common budgeting approaches
It is always exciting to take on a new challenge, such as becoming a CDO, but it can be daunting when there are so many new responsibilities that you may not have encountered before, such as budgets. There are two main ways to budgeting: top-down and bottom-up.
- Top-down budgeting: Setting goals and budgets based on the wider company goals and objectives, where resources are allocated accordingly to each department and team for the upcoming year.
- Bottom-up budgeting: Starting at department and team level and working up the ranks, the budget then accumulates before being presented to management and consolidated into a company-wide budget to meet objectives and goals.
The specifics of the scope of CDO can differ from business to business, which means there may not be one perfect budgeting approach that works in all situations. For an organisation where the CDO is active in the top-level decisions of the organisation, a top-down approach may be more beneficial for the data team as the goals of the department and the business may be more closely aligned. For an organisation that is still maturing and developing its data culture, a bottom-up approach may be more suitable as it will help highlight the needs of a growing department and can demonstrate ambitious projects.
Involve stakeholders
It is imperative that any budget you create includes input from relevant stakeholders, such as marketing, HR or operations. If the scope of a project you are looking to find funding for impacts these other departments, you need to include them not only for professional courtesy, but also because their contributions can be vital.
Firstly, if your project touches multiple departments, the budget may have the option to be split over the departments. Secondly, collaboration and cooperation will greatly improve the standing of the data department in the organisation – an ongoing issue that is regularly raised by DataIQ members. Thirdly, there may be aspects of a project that could benefit from outside involvement that you and the team had not considered.
There have been ongoing discussions within the DataIQ community about ensuring the data office is connecting and collaborating with different departments, and joint-project budgets are a prime opportunity to make this happen.
Be neutral
If you find yourself in the role of CDO having worked your way through the ranks, it is important to remove any biases from teams you previously worked in or favoured projects. You need to be objective in your budget and realistic in what can be achieved within the financial timeframe.
It can be easy to find yourself giving the benefit of the doubt to a project requesting funding because you know the team or have a personal connection with the project. As a CDO and a data leader, you need to highlight your ability to separate yourself from your previous roles and demonstrate that you can fairly work with other departments to reach business-wide goals.
Invest in training
There is a near-continuous conversation within the data industry about accumulating resources to provide training for improved data skills; make sure you provide yourself the same investment if you are lacking confidence with your financial skills after becoming CDO. There are plenty of different courses available that can help you hone your ability to present finances, collaborate with other department leaders to achieve a goal and improve your confidence. It is never too late to learn new skills!
Make sure you take part in the 2023 roundtables to get involved with conversations with other data leaders. Register your interest here.
