Working to an IT budget is a key component of business operations. It’s important to invest time into keeping your systems in the best possible shape to facilitate growth, rather than hinder progress.
Here are our top tips to help you shape the most effective IT budget possible, whilst encouraging buy-in from key stakeholders.
- Review the past to predict the future
A sensible way to begin your IT budget is to review the previous year’s spending. This gives you a baseline to work from and can give you an idea of how variable costs have fluctuated from month to month and year to year.
There are three main areas to focus on:
1. Areas that have suffered from lack of funding - look to increase budget.
2. Areas where spending has provided beneficial service or powered improvements - maintain the budget
3. Areas of over-spend where waste could be reduced with a more strategic approach - reduce budget
- Align with company objectives
Your yearly IT budget is a good opportunity to demonstrate how IT can help meet company goals. For example, a successful hybrid working environment requires suitable IT infrastructure to make the switch between office and home truly seamless.
Bearing in mind key objectives when constructing your IT budget will demonstrate to senior managers that you have the long-term fulfilment of business strategy at the forefront of your operational thinking.
This will make approval of budgetary suggestions more likely and encourage favourable evaluation of IT in the business.
- Budget for Hardware and Software
Hardware and software can cause problems when they’re not kept up to date on lifecycles and updates. This results in a degradation of services causing security risks, inefficiency, and outages.
To counter this, use an asset management system to track hardware and software, flagging the need for updates and alerting to when something is approaching end of life. This information can be fed into your budget scope to deal effectively with hardware and software lifecycles.
- Invest in security
The Office for National Statistics (ONS) Crime Survey for England and Wales showed that there were an estimated 4.6 million fraud offences in the latest reported year, a 24% increase.
With cybercrime and threats on the rise, it’s essential that you allocate sufficient resources in your budget to protect your organisation. It should be recognised that all other investment in IT infrastructure is at risk if serious incidents occur.
It’s also important to consider adequate cyber security training for staff, who can be your first line of defence. Without education there is an increased risk of human error, one of the major causes of data breaches.
- Don’t ditch training
Don’t be tempted to lower or remove training budgets for your team as a way of cutting costs. As seen in the security example, a lack of training could cost your business significantly.
Without adequate training your team cannot utilise IT systems to their full potential. Instead of reducing training, make it work harder. For example, introducing a relatively inexpensive wiki, portal or chat room per training can enable employees to discuss training and retain information.
- Take the necessary time
An IT budget should not be rushed. Your IT systems are used across your entire business so make sure you speak to and gain input from your management team as to what they see as priorities and areas requiring investment.
Additionally, an IT budget should be a living document as opposed to an exercise just to gain budget approval. Evaluate and update your budget monthly so it is accurate and useful as a guide to check if spending is on track.
