Every year, engineering leaders sit around conference tables with finance partners discussing one question: “How should we optimize the engineering budget?” Unfortunately, “optimize” often becomes synonymous with “reduce.” Can we reduce headcount? Can AI replace developers? Can we outsource more work? Can we delay hiring? Can we spend less on learning? These questions may improve the next quarterly financial report, but rarely do they build better engineering organizations. As part of Engineering Leadership Playbook (ELP) I share this article on engineering budget planning.

Over the last two decades, I have had the privilege of working across software development, consulting, architecture, product engineering, IoT, XR, AI, web3, metaverse, embedded systems, and enterprise modernization. During this journey, I have worked with small incubator team of a few engineers, or enterprise projects with 100s of engineers, consulting organizations, product companies, and engineering teams spread across multiple countries. One observation has remained remarkably consistent. Organizations rarely struggle because of technology.