IT budgeting and IT strategy should go hand-in hand – it’s part of your IT strategic plan. As a business leader, you don’t want IT to feel like a cost center – you want to be confident that you’re making the right technology investments.
IT Budgeting Best Practices to Get You Started
Evaluate last year’s spending – take a look at your actual line items for IT to understand your operating expenses. Decide what to stop spending on, what hardware and software will continue operating that you will keep spending on, and any new technology or projects you may want to implement – include even the smallest costs like potential new software training for employees. Account for price increases, such as software licenses price change from large vendors like Microsoft and change to IT infrastructure like digital transformation.
Evaluate inventory – do you need anything new that will require a large purchase (such as new servers for example)? How many day to day technology items do you have for new hires and current employees like new laptops, mouses, software for hybrid work etc? You’ll need to make sure you have accounted for these kinds of things in the budgeting process, as the cost of them can add up quickly.
Staffing – This is two pronged – hiring internal IT staff and leveraging external resources. Do you use any consultants service in relation to your IT? Examine your internal vs. external IT expertise and make sure to include their costs in your budget items. Additionally, if you leverage a managed IT services provider, this will need to be part of your budget – but the good news is they will also help you with the management process and budgeting! As always, part of your budget planning processes should include allocation for hiring IT staff, or hiring an MSP as mentioned above.
A word on cybersecurity – our experts say that security should have a large dollar amount allocated so that you can properly protect your business.
Develop short term and long term goals and align your budget with them. The most important part of IT budget planning is that it aligns with your business’ overall strategic initiatives. Part of this should also be budgeting time – understand timelines for projects or IT changes and how you will implement them over the year. It’s also important to get buy-in for your budget from the beginning, across the entire management and executive teams, so you can get approval for all initiatives you think are worthwhile.
Hope for the Best, IT Budget for the Worst
Helps ensure you have funds to allocate towards changes, emergencies and improvements so you can serve clients and employees well. It would be frustrating to have a perfectly planned budget and then realize you want to implement new technology that will greatly improve your business model – only to realize you have no budget for it.
Have a contingency plan in the budget for disasters, economic fluctuation and more. For example, an emergency hardware replacement or backup could cost your business a large chunk of change which will be even more painful if it is not allocated for in the future.
Information Technology Budgeting – It’s all in Proper Prior Planning
The IT budgeting process doesn’t have to be overwhelming – it’s all about assessing what you’ve done in the past and aligning the IT budget to your overall business goals for the future. If you dedicate the proper amount of time to comprehensively planning your technology budget, you’ll be in good shape for both everyday IT activities and larger projects – and as is always the goal, it will help you work towards achieving your core business initiatives.