“A budget is telling your money where to go instead of wondering where it went.”
That quote from John Maxwell sums up the importance of a solid information technology budget. And while IT budget planning can seem tough — even a little scary — it’s far worse trying to manage IT needs without one.
The success of your company depends on its IT infrastructure, so it’s important to get your tech budget right. We invite you to consider these steps in how to create an IT budget that will work for your business.
At the top of the list in IT budgeting best practices is understanding your primary objectives. Start by identifying your business goals for the year and assigning them to a priority category. We recommend starting with these three high-level categories:
Next, review last year’s list, if you have one. Move any items into categories for this year as needed. Maybe something in the previous year’s “could use” bucket needs to move to the “must have” bucket this year.
Your IT budget is a reflection of the overall tech strategy of your company. If a primary goal is to move applications and services to the cloud to reduce costs, then your budget should be heavy on those projects and priorities.
Keep in mind that the budget you create will set the tone for the IT department for that year, so it should be tied to the larger technology or company vision.
Related: The Real Cost of Operational Downtime
Many tech budgets have gotten tighter due to recent economic turmoil and uncertainty. But you still need to invest in IT — especially given the huge significance of technology in connecting people and allowing more remote work options today.
Focus on the big goals or objectives. If your organization needs to cut costs to help recover from losses you may have incurred due to economic downturn, make sure any unnecessary items are left out of this year’s budget.
If you find that’s the case, it may just be a matter of delaying certain things. For example, items that aren’t 100% necessary this year (the “could use” or “would be nice” items) can be moved to next year’s budget as potential “must haves.”
An IT budget can be divided into categories. The categories will vary from business to business depending on the structure and sophistication (or even the existence) of your IT department. But this is a good example framework you can start from, courtesy of TechRepublic.
Staff & Compensation
Hardware
Software
Project Expenses (Non-Recurring Costs)
First: Project 1
Then: Project 2, Project 3 and so on.
Learn More: Is Fully Managed IT or Co-Managed IT Right for My Business?
You’ve built the budget; now it has to be approved. In this environment, it’s important to show areas of reduced spend or more efficient practices.
Months before your new budget is due, try to find items that can be reduced or moved around to either make room for other new expenses or show some savings for this year. Those in charge will want to see that effort’s already been made to save money and trim the budget.
Budgeting is only one aspect of setting up your IT department for success. Where can you go from there? You’ll need to ensure the right pieces are in place with your IT support system to continue to meet company needs and justify your budget.
We’ve created a checklist that goes through important factors, such as gathering the right team, creating a structure of responsibilities and more. Even if your company already has an IT department, this list will help you understand some of the best practices and incorporate them into your existing setup. Just click the link below to access your free copy today!
