Suppose that you manage the customer service department at a company that generates $100 million in sales - this may be a manufacturer of fitness equipment and attire. Assume that you just started the job and that end of your second day, your boss sticks her head in your office and announces, "I'm in a rush and have to go, but I wanted to let you know that I put $45,000 in the budget for computers for your department next year. Is that OK? Unfortunately, I've got to know by the day after tomorrow. Thanks". How do you respond? You have two days to decide. If you agree to $45,000 and it turns out to be insufficient, then sometime next year your department will lack computing resources and you'll have a management problem. If that happens, you may to spend over your budget. You know that effective cost control is important to your new company, so you dread overspending. However, if you ask for more than $45,000, you will need to justify why you need it. How do you proceed?

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w Hardware Budget Dilemma What we know so far: 30 employees in your department: 7 Analysts 16 Customer Service Representatives 4 Administrative Assistants 3 Part-time There are 2 new hires slated for your department current plans to have these positions filled by middle of the budget year. Positions to fill are 1 analyst and 1 customer service representative More information: Company policy on equipment rotation is 4 years. Following is a breakdown of the department's current inventory by equipment age. 2 Analysts approximately 2 years 4 Analysts approximately 4 years 1 Analyst approximately 5 years 5 Customer Service Reps 5 years 8 Clerks approximately 3.5 years 3 Clerks approximately 2 years 2 Administrative Assistants approximately 5 years 2 Administrative Assistants approximately 4 years Department network laser printer approximately 4 years Mandatory software expense of $30,000 to be assessed due to implementation of CRM Customer Service module (Enterprise Resource Planning Project, Phase 2). Your department also is charged for annual license for a variety of software applications including Microsoft Office suite, malware protection, and various utilities; cost of these applications is $95 per user. Items to consider: This budget covers anything that is related to information systems. It includes normal supplies for printing, additional software, and other items such as replacement accessories (keyboards, mouse, flash drives, etc.) for your staff for the entire year. WHAT ANSWER DO YOU GIVE YOUR BOSS? IS $45,000 ENOUGH