You can tell a lot about a company by the way it spends its money. Historically, businesses do not consider increasing IT budgets. In fact, IT, more than any other area within an organization, has been forced to do far more with far less. But a shift in priorities and investment is emerging. With more of the spotlight on information technology, IT budgeting becomes more important than ever.
Outside of salaries and general personnel costs, your budget needs to account for several areas of spending in an IT department:
Hardware: Hardware and software are typically the biggest investment areas in an IT budget. The hardware component is driven by the type of hardware in an environment and when it is due for a refresh. Refreshes can be very costly, which is why organizations are increasingly looking at alternatives like cloud solutions. Undeniably, the cloud could be a cost-saving alternative when done right.
Software: The software category includes licenses and any SaaS applications the company may be using. As a result, this category is a largely predictable expense, which makes it easier to account for.
Cloud Services: If SaaS applications are not lumped in with software, they will be here along with any other “as a service” solution used by the company. Like software licenses, cloud services are for the most part a particular expense.
Backup, Disaster Recovery and Business Continuity: Unfortunately, this category is too underrepresented in budgets. Be sure to understand any gaps in this area and increase your backup and disaster recovery budgets as needed. Whether an accident, disaster or ransomware attack, a data backup and disaster recovery plan are often the only things that can prevent a complete loss. Some organizations opt for a managed backup and managed disaster recovery approach to ensure the business is protected today and in the future.
Projects: The project budget is going to vary depending on the year. The key is to plan out your projects in advance and approximate the cost. This practice will help you align your projects as well as your overall budget with your strategic goals.
Discretionary Spending: Things happen, new solutions are released, and no one can predict the future. There’s going to be expenses you did not expect, and discretionary spending will account for any holes or mistakes elsewhere in the budget.
Business Training: We all know how fast the technology industry is moving. For that reason, it is absolutely essential that some funds be set aside for continuing education. Without an informed team, you may remain unable to implement new cost-saving solutions, or worse, you may not even be aware they’re out there. Training not only ensures you are taking advantage of technologies that can enable your business, but also helps retain your key talent.
A good budget is like an instruction manual. It provides a backbone to guide your decisions for the coming year. If you build it correctly, you’ll be able to weather unexpected complications, expand the skills of your team, and move your IT environment another step forward. Focus on your goals and make sure every dollar helps you get there. QCBN
By Theo Soumilas