With 2017 arriving, the time to prepare or fine-tune your IT budget is here. Besides helping to keep IT spending costs under control over the upcoming year, the budgeting process can be valuable as a method for identifying areas where more investment may be needed. Below are 10 tips to help the process go as smoothly as possible.
1. Invest some serious time in the process
Don’t feel that you have to complete the entire budgeting process in one day. The best budgets will incorporate feedback from a variety of sources, including management, IT personnel, and any outside consulting firms you work with. Assembling and analysing all this data can take time, so rushing the process can impair your budgeting efforts.
2. Baseline against previous budgets
Whilst it may be tempting to base your 2017 budget strictly on expenditures for necessary equipment and services, looking at past budgets can provide valuable insight as to how the company’s IT spending has varied from year to year and month to month. This makes it easier to estimate what portion of your spending is likely to be either planned or ad hoc.
3. Leave some wiggle room
Your IT budget should leave some room for unexpected expenditures over the course of the year. Given the rapid change taking place in the technology arena, along with the potentially unpredictable nature of a company’s needs, trying to nail down your IT budget to the last pound can be counterproductive. For best results, use past years’ spending patterns to set aside a certain amount of budgeted funds for unanticipated spending during the year.
4. Budget with strategic goals in mind
Your company’s IT system is likely to play a big part in achieving its strategic goals. As you budget for 2017, keep this in mind when determining your spending priorities. Whilst there are many desirable IT assets and services to choose from, focussing on those that are most likely to help your company meet its strategic goals is recommended.
5. Allocate funds for product updates and upgrades
During any given year, it is likely that some portion of your hardware and software assets will need to be updated or upgraded. Your budget should take into account the funds necessary for keeping your IT assets up-to-date. For firms that have migrated a large portion of their IT operations to the cloud, this is less of an issue, as cloud services typically feature predictable monthly or yearly payments that include automatic updates to the services included in the cloud bundle.
6. Include IT security measures
With cybersecurity more of an issue than ever, given the upsurge in security breaches in recent years, dedicating a portion of your IT budget to security measures is highly recommended. In addition to purchasing security software such as anti-virus solutions and firewalls, hiring a managed software services firm to conduct penetration testing and other forms of security review can pay dividends when it comes to increasing your company’s IT security.
7. Dedicate funding for necessary IT training
Whilst it can be tempting to try and save on IT costs by neglecting staff training for IT operations, this approach may be counterproductive. Modern business solutions can be quite challenging to operate optimally, which means that money spent to ensure that your employees acquire the skills to do so is likely to be money well spent.
8. Treat IT expense as both an investment and a cost
IT spending has long-term effects on your company’s operations that make such expenditures, in many cases, more appropriately designated as investments than costs. Your budget should reflect this by incorporating return on investment (ROI) estimates related to such spending.
9. Benchmark your IT spending against industry averages
Given the strategic nature of IT spending in today’s business world, it is important to compare your company’s spending in this area against that of industry competitors. Your IT budget should be attuned to your company’s particular needs, of course, but if the proportion of the budget devoted to such spending diverges significantly from that of your competitors it may be a sign that further analysis of IT spending levels is needed.
10. Survey your employees
Your company’s staff operates where the rubber meets the road, enabling them to provide valuable insight into where your IT spending priorities should be. Before finalising the IT budget, make sure that you have queried staff members as to where they feel the company’s IT pounds would best be spent.