Does your Business Need an IT Budget Review?
For many business owners, IT budgeting is one of the more challenging tasks in the financial planning process. It requires strategic thinking about business initiatives and the hardware, software, and services needed to support the company’s goals. Calculating and managing costs for cybersecurity, compliance, network management, and even laptop purchases can be overwhelming. Technology is evolving so quickly that it is impossible for a small business owner to keep up.
A strong relationship with a professional and experienced MSP can help you to navigate the technological and financial decisions needed to meet your business initiatives. An imperative part of this partnership is a regular IT budget review.
Typically, companies draft budgets at the beginning of the financial year and review them annually. Reviewing the budget quarterly is a more tactical approach that empowers organizations to identify problem areas, take advantage of opportunities and adjust to changing environments.
An effective IT budget addresses IT personnel (internal and outsourced), IT infrastructure expenses (hardware, software, services, and subscriptions), and IT expenditures (capital, operating, and projects).
The five questions below may help you develop an IT budget planning template as part of your review process.
1. Is your budget offering the flexibility needed to meet business goals?
Your IT budget should never be a barrier to achieving mission-critical goals. Both large and small businesses need the flexibility to adapt to changing circumstances in network management and security. Is your budget scalable to allow for new technologies that may help to grow your business? Can you outsource IT tasks that may free up valuable time for employees to work on business-critical goals?
2. Are you keeping up?
Are you unable to adopt or transition to new technologies that help your business? If so you may need to consider working with an MSP or technology provider who can offer innovative technology as part of a service agreement. This is true for changing security and compliance requirements. These types of arrangements help you scale while keeping IT investments in a predictable range.
3. Have you budgeted for a remote workforce?
COVID has changed everything. Review your IT spending to allow for investments in cloud services. Your company can benefit from remote work arrangements to retain employees and attract new talent, all while reducing operational expenses.
4. How predictable are your IT expenses?
If you’ve been budgeting using a project only or break/fix IT model, you may be frustrated by random and unexpected hourly expenses plus the cost overruns this type of approach often incurs. An effective IT model includes predictable operational expenses that allow you to plan for and pay for the resources you need. An MSP plan is one way to stabilize your IT expense.
5. Is your IT spending effective?
IT budgeting is an investment. Looking at IT costs as expenses only hinder your staff and your goals. A critical IT failure could cost much more than the management and maintenance expense. Your IT budget should include investments in personnel, infrastructure, and services that limit downtime and business disruption.
Contact us today to learn more about developing an effective IT budget that helps you strategize and manage your IT investments.