While most business owners understand the value of creating an IT budget, it can be easy to lose sight of why budgeting is so important.
When it comes to budgeting, especially planning your IT budget, you can choose to make it a painful annual process that you’d sooner avoid or you can approach it as a chance to reflect on where your business has been and plot where you want it to end.
Instead of tweaking last year’s budget to account for changing costs, develop your IT budget so it can be seen as an opportunity to get everyone on the same page and equip yourself with a business strategy that helps you to make changes ahead of time. Budgeting also acts as a great yardstick to ensure that your spending stays on track.
To make things easier, we’ve put together a few questions about budgeting that all IT managers should consider.
Who does your IT budget affect anyway?
While an “IT budget” may seem narrowly focused, this expenditure directly affects many aspects of your business. An IT budget shouldn’t only be considered as the allocation of funds to benefit IT staff. If your sales team needs new mobile/digital tools to market your products or if your accounts department can benefit from an automated cost allocation platform – but your IT budget is too small – this will have a negative effect on the ability of your sales staff to do their jobs properly.
What is the role of IT professionals in budgeting?
For IT professionals, it comes down to finding rands and cents. They must explain to the finance department why they need to make investments in certain tools and IT solutions. These conversations should be based on hard facts so that those responsible for budget allocation have a comprehensive understanding of why investments make good financial sense.
What’s the value of drafting an IT budget?
The process of developing an IT budget needs to start somewhere. Take a look at your budget fromor the previous year and see where expenditure can be reduced or reallocated. Let’s imagine you’d like to make a 25% improvement on your current spending habits. Once you’ve reviewed your processes, and identified where you can trim the fat, be open to the fact that it may take a few drafts, iterations and reviews before you hit your target.
What should you include in your IT budget?
A realistic IT budget accounts for everything from routine maintenance, product warranties and system replacement costs to software licence fees and even unexpected system failures. In addition, don’t forget to include all support costs, the cost of buying new hardware and making provisions for Cloud services. Budget should also be allocated to your backup, disaster recovery and business continuity efforts and to future planning and the implementation of different IT projects.
When it comes to IT budgets, there will always be a few costs you didn’t plan for. If you want some extra advice on how to guarantee that your IT budget covers all the bases, we’re here to help. This handy IT budget development guide offers a five-step process for effective budget development. Download it here
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