Why Is IT Budget Planning Critical To Business Success?

There are a few ultimately inevitable things when it comes to each new year: new resolutions to keep, new technology to catch up on, and new budgets to plan. 

Depending on your organization’s culture and the value of technology to your finance department, the latter can be a very daunting process. 

Whether you’re excited about the technological prospects or you’re already looking forward to the next new year, we’ve gathered a few tips to help you be more successful through the IT budget planning and approval process with your financial decision-makers.

CRITICAL FIRST STEPS FOR YOUR IT BUDGET PLANNING PROCESS

Here are the first steps you need for a carefully crafted IT strategy to align with your budget planning process. 

#1 – TALK TO PEOPLE AND PRIORITIZE

You – along with everyone else in your organization – have needs, and you have wants. It is important to get those in order, or else you risk having a “want” approved for your IT strategy while a “need” goes unmet. 

Talk with the movers and shakers of the various departments that will be affected by the IT budget you are proposing. 

Gather their honest input and feedback with the goal of gathering allies who will support – and even lobby for – your IT budget items. It is often critical to have these leaders and influencers be publicly supportive of your proposals to help sway opinion in your favor. 

When you have gathered your allies and their feedback, revisit your list of priorities and add any support you have gained to the prioritization consideration. Without a clear list of all such needs and wants, you’re setting up your IT budgeting process for failure. 

#2 – CONSIDER ALIGNMENT

Next, go through your list of priorities one by one and check to see if they align with your company’s vision and IT strategy. Aligning your priorities like this is the best way to demonstrate the strategic value of your proposed priorities to your CFO.

Furthermore, it displays you have the whole company in mind rather than a more close-minded or selfish approach for some pet projects you’d personally like to focus on. 

This small touch will help validate your request in the eyes of the financial decision-makers better than almost any data – although that data is still critical. As you’re working toward IT budget alignment, take care to keep your descriptions of each expenditure request clear and concise and be wary of being over-technical. 

Speak specifically to the need each item addresses, who benefits from or supports the purchase, and how it helps to align IT budgets with company goals and vision.

#3 – DO YOUR HOMEWORK

Now that you have your priorities sorted and aligned based on company needs and goals, it’s time to start doing some legwork and gathering some hard numbers about operating expenses, costs, impact on the organization, etc. 

It may sound like it’s too early to contact vendors – you don’t even have approval after all. However, starting the process of vetting vendors as early as possible is a great way to gather a list of preferred vendors and their pros and cons that you can bring to the proposal.

Doing this will show your financial decision-makers that you have thought each piece through and done your research, earning you some clout in the negotiations. 

Additionally, you may earn some hidden discounts your organization is eligible for that aren’t advertised publicly or even foster competition between vendors which will always get you a better deal. 

These discounts can make a huge impact on your IT budget planning process by opening up more resources for more priorities or even that all-too-necessary “rainy day fund.”

#4 – EXPECT THE UNEXPECTED

Despite your best efforts, no matter how carefully planned your IT budget is or how well you accounted for cost-increase scenarios, it is still going to happen. 

Our advice for this scenario is to expect that it will happen and prepare for it by creating a little wiggle room in your proposal for all IT initiatives. You can do this by adding a separate category to your budget to cover various miscellaneous expenses and unforeseen purchases. 

Consider many of the most common failure points, such as workstations, monitors, peripherals, printers, networking hardware, security, software licenses, and the like. Be realistic here – it’s easy to go overboard. However, stress the importance of having that cushion for preventing the stress of cost creep.

#5 – DO THE MATH

In the final steps of IT budget planning, it is crucial to count all of the costs and bring the data together in an informative way. Nobody wants to see an approved IT budget sour due to significant hidden costs that you could have caught during the vetting process. 

To avoid this, you will need to look at each expense from every angle and consider every aspect of any project – cradle to grave – and include any potential additional costs in the proposal as well as impacts on the budget calendar. 

Additionally, you will need to bring all of these figures to the table in an easy-to-digest manner. This is where the data comes in to demonstrate the overall impacts on financial and IT leaders.

Financial decision-makers love numbers and figures, so use your graph-making and statistics skills to build and present compelling figures for the IT budget proposal. A good example here would be to use data to get people excited by displaying the results your IT initiatives and previous budgets have achieved in other companies. 

Doing this will display the opportunity and potential these items offer. It also never hurts to show how certain projects and upgrades can potentially save effort and money in the long run. 

Ask your pool of vendors that you vetted in step three to provide you with some of the numbers from their case studies to demonstrate this effect. If you bring all the math to the table, you will create more certainty and understanding of the holistic impact of the items you are proposing rather than just the cost.

HOW TO REDUCE IT COSTS

Having a fully functioning and operational IT department for your business is an especially valuable investment. 

From protecting your company from external hackers and digital threats to backing up data files, transferring information to the cloud, and monitoring the “Internet of Things” accessibility, there’s no limit to what an IT department or Managed IT Services Provider can do for your business. 

The last thing you want is for your network to crash or for files to be misplaced without IT professionals on your side and on call. Attempting to correct the problem on your own can result in the loss of workdays, clients, and client data.

However, despite the importance of an IT department or an MSP, you are a business on a budget, which means you can’t just blindly throw money at your information technology department. 

Thankfully, there are IT budget planning ideas you can follow to help reduce expenses without losing the valuable resources and services of an in-house IT professional.

OUTSOURCING YOUR IT DEPARTMENT

One of the biggest expenses a business runs into is having an in-house IT staff on hand. As your business grows, you may find this to be a necessity, and you allocate funds to your IT budget. 

However, most small to medium-sized businesses do not need to have a permanent IT department within the company. Most of what an IT professional does for a business of this size can be controlled off-site. From network scans and locating malware that has made its way into the network to upgrading files and helping with troubleshooting, all of this can be handled through outsourcing.

When you hire an IT professional to work in-house, you’re paying a hefty sum of money for such an employee. Not only are you paying their salary and benefits, but you’re also paying taxes and Social Security on this individual. All of this will quickly push expenses to over $100,000 annually.

However, when you outsource your IT needs to an IT Support Team, you share the costs with other companies similar to yours. Other businesses do not need to have an in-house IT professional either, and they adjust their budget planning accordingly. 

Instead, the companies simply need professional assistance for troubleshooting, updating, and at other sporadic times throughout the work week. Because all of this can be handled off-site, it’s far more cost-effective to share the IT costs with other businesses. 

This way, you’re not in charge of paying the individual’s Social Security or taxes. Instead, you pay a flat fee, which is usually a fixed cost charged to your business on a monthly (or annually) basis.

And that can make your IT budgeting process a whole lot easier. 

RECEIVE AN IT SECURITY AUDIT FOR MORE IT COST-CUTTING IDEAS

It can be difficult to know exactly how to go about adjusting your IT services to both save money and maintain the current level of productivity. The best way to do this is to take advantage of an IT security audit. 

Offered to you by Charlotte IT Solutions, the IT professionals will comb through your business and help identify the best IT budget-cutting ideas for your company. This will help you discover how to reduce IT costs without sacrificing IT security or productivity.

Perhaps you’ve already outsourced your IT services. Or, maybe you do, in fact, need to have an IT professional on hand, but you are unsure if what you are paying for, either an individual or third-party IT company is exactly what your business needs.

The truth of the matter is that 43% of cyber attacks target small businesses, and the average cost to that small business after a security breach is anywhere between $100,000 to $120,000! 

This could happen to anyone, which is why it’s important to receive an IT security audit and be aware of your business’s digital weaknesses. And if you plan for such an audit on a regular basis in your IT budgeting process, then you can protect yourself from heavy losses due to cybercrime. 

Charlotte IT Solutions offers IT security audits to evaluate those potential security threats and weaknesses. We can work with all types of IT budgets and will provide you with a clear list of priorities that will protect your business. 

MOVE TO THE CLOUD

If your business hasn’t moved its data storage to the cloud, now might be the time. Storing company data on the cloud is generally far more cost-effective than storing everything locally. 

When you store files locally, you’re forced to constantly upgrade equipment, not to mention transfer files to multiple drives in case one drive fails on you, which eats into your IT budget. There is also the hidden expense of cooling a designated data server room within your office, which increases utility costs each and every month.

By switching your data storage to the cloud, you’ll instantly slash the amount of money you pay on utilities. 

You’ll also avoid the unnecessary expenses of updating hardware, and you’ll find IT costs will drop as you can share the cost with other businesses using the cloud system as well. Instead of just paying to protect your network through extensive security and firewall systems, you’ll pay a fraction of the cost of the cloud.

CONSIDER DIFFERENT SOFTWARE OPTIONS

Most software providers no longer charge a one-time fee to purchase the software (and usually a set number of licenses for the software). Instead, you pay a monthly fee to access the software. 

While you do receive all program updates built into the monthly service fee, you’ll quickly spend more money on the monthly rental fee over what you would have paid had you bought the software.

Because you are no longer able to purchase the software, it may be best to move on from the company and switch to open-source software. 

Google, for example, provides a number of free applications. Many of these applications replicate some of the more popular programs, like Microsoft Word and Excel. While the free programs may not be as powerful, as long as you are not a power user, the free software may be perfectly fine, making this one of the easiest budgeting tips to implement. 

This alone can help save you hundreds if not thousands, of dollars annually in your IT budget over the cost of the monthly subscription fee.

OUTSOURCE YOUR IT BUDGETING PROCESS

Most small and medium-sized businesses struggle with the IT budget planning process. Not only do they often not have the necessary insights into different technology options, but it can be very difficult to separate needs and wants to come up with a priority list. 

Here at Charlotte IT Solutions, we can help all of our clients to come up with a clear and fully planned IT budget that will align with all your business goals. 

Call us today for a free consultation, where we will explain exactly how we can guide you through the process.