How to Budget Your IT Services for Your Current Needs

The digital transformation of businesses across the globe has made having a robust IT infrastructure mandatory. A state-of-the-art IT infrastructure not only increases the efficiency and productivity of your organization, it also provides you with an edge over your competitors.

In fact, global IT spending on devices such as printers, tablets, smartphones, and desktops reached a huge 712 billion U.S. dollars last year. However, for making the most of your company’s IT infrastructure, it is imperative that you create a practical IT budget.

A well-planned IT budget can help you understand how much capital you will require to address your organization’s IT services needs. This, in turn, will assist you in securing and prudently allocating funds from your overall budget towards your IT function.

Let’s take a look at a few important considerations to bear in mind when preparing an IT budget.

Key Points to Consider When Creating Your IT Budget

1. Refer to Your past IT Budget

You should treat your past IT budget as the baseline for preparing your current budget. From determining where the IT funds were allocated to which strategies generated the most revenue, the past budget will help you understand the goals, priorities, and spending capability of your organization.

For instance, cloud storage and off-site data back-up can effectively help your organization mitigate downtime arising from system outages and data breaches. Therefore, if migrating to the cloud is a crucial part of your IT plan for this year, you should allocate a substantial portion of the budget to this activity.

Simply put, the past IT budget will serve as a performance indicator of your business’s overall IT growth and help you put together your current IT budget in a better way.

2. Audit Your Existing IT Infrastructure

Preparing an effective IT budget requires you to have extensive knowledge of your business’s current IT infrastructure. Listing your existing IT assets and analyzing the performance of each will give you a solid base to create a workable IT budget. Here’s how you can do it:

• Find out which IT assets your organization is currently using. These IT assets can include software applications, network and hardware infrastructure, phone systems, among others.
• Know which applications, devices, and software are performing well and which ones require updates.
• Keep a check on the technology lifecycle of each of your IT assets. From the age of the assets to their expected replacement date, analyze everything, and replace obsolete ones.
• Understand the various vulnerabilities and cybersecurity threats pertaining to your IT assets.
• Analyze and rank security threats in terms of the danger they pose to your organization.
• Identify your company’s current IT goals and the steps that need to be taken to achieve them.

3. Consult Your Internal IT Team

It is important to communicate with your employees when preparing the IT budget. For instance, you can ask them if they need new hardware/software or if they are looking forward to cybersecurity training. It will help you prioritize your IT budget according to their needs, thereby optimizing their overall performance and enhancing your business’s efficiency and growth.

4. Align Your IT Budget with Your Strategic Goals

Instead of blindly following the latest technology trends, you should focus on investing in technology that is in line with your business’s IT requirements.

For instance, if you’re looking for modern communication technology for your customer support team, investing in a VoIP telephony system can be helpful. Similarly, your IT security team may want to invest in Mobile Device Management (MDM) to effectively secure the personal devices of employees from data theft and malware infiltration. You need to take these goals into account when preparing your IT budget.

5. Focus on Results

Apart from making the right investments, you should focus on the results from these investments. For instance, instead of hiring full-time IT employees on a competitive salary for meeting your routine IT requirements, you can outsource IT support jobs to a Managed Services Provider (MSP) and save considerably on your staffing cost.

6. Keep a Budget Contingency Plan in Place

The crisis can occur at any time. Whether you are dealing with the financial effects of data breaches or natural calamities, a budget contingency plan can ensure that you have enough funds to meet unexpected IT expenditures. In other words, setting aside funds for unanticipated IT expenses is better than incurring operational cost losses arising due to unplanned downtime.

7. Review Your Budget

Reviewing and re-evaluating your IT budget will help you understand how to allocate your funds. All in all, it gives you a holistic view of your expenses. As a result, you will be able to plan your IT budget better.

For instance, if you invested in an expensive hardware set-up, but your employees started working remotely, you can minimize these investments in the next IT budget. Instead, you can use a good part of your IT fund to set up Remote Monitoring Management (RMM) and Virtual Private Network (VPN) for better functioning of your remote employees.

Wrap Up

A well-planned IT budget can give you a precise view of the funding requirements for maintaining a robust IT infrastructure. This, in turn, will help you equip your IT team with the best technology that enables them to perform their tasks seamlessly. A sound IT budget will also assist you in keeping a check on your overall technology spending and minimize wasteful expenditure.