The consistent advancements in business and technology environments require your ability to forecast and manage your IT budget as efficiently as possible. When IT budget planning is done correctly, you can increase your return on investment and take the opportunity to focus on new opportunities.
Follow these five steps to create the perfect IT budget for your small to mid-size business’s short-term and long-term goals.
1. Review the IT budget from the previous year.
If you made an IT budget last year, review it. Pay attention to what worked and what didn’t. Where do you want to make changes? If you spent money on new equipment, such as desktop computers or a new server last year, then you probably don’t need to buy those items again. You can also use last year’s budget to find recurring expenses easily.
2. Know the recurring costs.
Certain IT costs won’t change much from year to year. Some common recurring IT expenses are:
- Cloud storage space.
- Renewing software licenses.
- URL registration.
- Content management systems.
Your recurring costs may differ from those of other companies. Pay attention to how your business spends money. Then identify recurring expenses that you haven’t included in past budgets.
3. Take inventory of your IT equipment.
Make a list of your IT equipment, tracking how old the items are. Once you have a completed list, you can decide whether you need to update your equipment.
Updating tech is up to you, but most companies purchase new desktop and laptop computers every three to five years. A 5-year-old computer may seem to work well, but it probably can’t keep up with the speed of newer models. Therefore, it will lower the productivity of your employees.
Other pieces of technology that you might need to update include:
- Servers (about every three years).
- WiFi routers (every four or five years).
- Mobile devices (every two or three years).
If it’s time to upgrade your IT equipment, then you need to create a line for that expense. If you don’t need any upgrades, then you can reserve your money for when the time comes.
4. Speak with your employees and managers.
Your employees and managers probably have a better idea about what upgrades your company is needing. After all, they use your equipment and applications daily.
Take the time to speak to your team members to learn more about what they would like to see in next year’s IT budget. If you hear the same requests from a lot of people, consider adding a line to your budget. Don’t feel obligated to fulfill the wish list of a few people. Only add the expenses if you’ll get a good return on your investment.
5. Plan for the future.
This year’s budget should include a line for research and development that will improve your company’s ability to compete with other businesses in your industry. Depending on your industry, this may include things like:
- Sending managers to IT conferences to learn about upcoming products.
- Hiring coders to update proprietary software.
- Improving your IT infrastructure security against the latest cyber threats.
Researching your future needs will make it easier for you to predict your IT expenses over the next few years.
IT Budget Planning Services
Effective IT budget planning ensures that you spend money wisely while you update your company’s technology. You can take a stab at making an IT budget without outside help, but you run the risk of missing an important line item.
If you haven’t made an IT budget before, then you may need to hire a consultant to help you find hidden costs and make accurate predictions. We’re more than happy to assist you with creating a solid budget that will accurately account for your expenses.
The BPI process for managing your technology budget starts by managing the technology assets. All equipment, software and services are logged in our master asset database. We’ll forecast your annual operating budget and your multi-year capital budget. Equipment is given a life-cycle management schedule, everything is optimized for your business operation, which will, in turn, improve the return on investment.