With businesses and people so reliant on technology today, information technology (IT) has become a massive enabler. We’ve seen how it’s boosted productivity, provides communication and collaboration, as well as cutting costs.
Even with those perks though, managing a budget for IT is still tricky.
Getting upgrades you need, addressing security costs and even the time it takes to fix problems eats away at the budget. Paired with the frequency of cyber-attacks that can lead to money loss and loss of time, it’s clear you have to be careful about who you’re investing in for IT support and how much it costs.
In order to ensure you’re getting the most out of it, it’s important for you to be putting together an IT budget. By putting together a budget, you’ll be able to:
- Ensure your systems are performing well enough.
- Anticipate when your business needs are going to change.
- Reduce surprise of unexpected technology costs.
- Be informed of what you can and can’t achieve with respect to IT.
With it being such a handy tool, here are some tips and best practices for when putting together an IT budget.
Measure From Past Performance
If you’ve made an IT budget before, that is an excellent starting point. If you haven’t, that’s fine. You’ll simply need to gather the data you have on IT investments, costs, and any trends that could suggest other expenses this year.
If you’ve got a business plan, you can even use that to outline your IT needs too.
Always Start With Fixed Costs
Like with any budget you do, you want to start with the easy points. This being all the fixed and ongoing costs you’re incurring. Things like software upgrades, cell and telephone costs, cloud storage, internet access, IT support costs and so on.
Plan To Invest In Diverse Scenarios
Businesses grow and consistently evolve over time. Year after year, the business it was will be different. How these changes take shape can be businesses simply growing in profits and are able to afford new things. In other cases, businesses expand and delve into new markets or lines of business.
This is something your budget should anticipate a little. From an IT standpoint, IT doesn’t care so much about the method of growth or change, rather it should scale with your business as a whole.
If you’ve made higher profits this year, expand the budget. If you’re expanding, be sure to address that expansions IT needs.
Account For Training Costs
Because you’re introducing new systems that you’ll have to train staff for, it’s smart to note training costs in the budget as well. Generally speaking, you’ve got two types of training: online courses or hands-on in-person training. The latter is more costly, but more effective long-term while the other keeps costs lower.
Depending on your own business needs – and from your budget and staff – you should be able to determine what’s the best fit for training costs.
Remember The ROI
As you plan for the year, be sure to review the businesses IT wish list and anticipate cutting out projects. Specifically projects that don’t add significant value to your business or are dubious at best.
The budget at its core is a representation of business priorities and objectives. With that in mind, you want to ensure the money is being put towards the things you want to be prioritizing so you can make a good return on investment.
Cutting down processes and operational expenses that don’t benefit you is something you should be doing on a regular basis as you go through the year.
Write The IT Budget Yearly
The IT budget shouldn’t be a monthly thing. Rather you should do it once each year and break that spending down into each month.
Still Treat The Budget Like A Living, Breathing Document
Similar to any budget, use it as a point of reference and don’t be afraid to make edits to it time and again. Costs can exceed the forecasts you made and so checking on it once in a while can help you make accurate and appropriate adjustments.
Another thing to check is how IT investments are impacting the bottom line. Are you getting a good enough return for what you are spending?
Treat IT As Part Of The Business
The final tip is from this point forward start treating IT as part of the business. We all know IT plays a significant role in the daily operations of the business. It’s now time to reinforce that thinking through business processes and procedures.
Get IT involved in meetings, do deep strategic IT meetings on an annual basis. Involve your IT team in business planning too. Their input is valuable.
Mtek Digital Managed Business Service
Mtek Digital provides help with virtually any business technology requirement. From IT services to Web and Video Marketing, we’re capable of servicing the tech industry throughout Canada. Contact us today.