Riordan Manufacturing Information Technology 2004 Budget Amendment
Riordan Manufacturing Information Technology 2004 Budget AmendmentJose J. CamposCMGT 578 – CIS Strategic ManagementDecember 7, 2015Instructor: Kenroy RegesterRiordan Manufacturing Information Technology 2004 Budget Amendment A budget is a vital for running a business effectively and efficiently. Budgets are used to gauge the direction where the business is going. Riordan Manufacturings Information Technology (IT) 2004 Fiscal Year budget is based on compensation and non-compensation items that run the IT department and the company’s IT infrastructure. Budgets are set by using close department economic forecasting to determine realistic limits (Elmerraji, 2015). A budget is a tool that acts as a guideline which means that it does not force Riordan Manufacturing to stay within the limits set. Budgets can always be changed or modified. Amended Budget In the original budget Riordan Manufacturing Information Technology (IT), Budget was set for $1,901,300 for the 2004 fiscal year. Riordan Manufacturing’s Information Technology department has been given the task to revise and amend the IT budget for the 2004 fiscal year according to the following requirements: An increase in spending on items related to hardware, software, and outside IT support services by 4%, and a decrease in the overall budget by 2%. Once the numbers that will satisfy the requirements are calculated a new amended IT budget for 2004 fiscal year will be presented.
Decrease in the Overall Budget To meet this requirement the total overall budget needs to be decreased by 2%, which is $38,026, from the original $1,901,300 budget. The new amended budget needs to meet a total of $1,863,274 or less.Increase Spending in Hardware, Software, and IT Support Services The second requirement in the budget amendment is to increase spending cost for hardware, software, and outside IT support services by 4%. To meet this requirement from the original budget of $1,901,300 increasing the cost of these three categories by 4% would set the new budget total to $1,905,048. It is an increase of $3,748 in the fiscal year to meet the requirement.[pic 1]Final Budget Calculations To satisfy both requirements, a total amount of at least $41,774 needs to be decreased from the original $1,901,300 budget in order to meet the new amended budget of $1,863,274.[pic 2]Areas to Decrease Cost to Meet New Budget Budgetary amends is one common strategy a business uses in order to meet business and economic goals. In order to meet the requirements Riordan has set for the 2004 fiscal year, there will be budget cuts from the following areas in the IT department: conferences, office supplies, shipping, special projects, travel, entertainment, and bonuses.