Now, more than ever, we’re all so much more reliant on technology – to keep our businesses running, our suppliers paid and our customers and our employees connected.
But all that vital business IT costs money. And if you haven’t budgeted properly, there’s a risk you won’t be able to get what you need. Which could mean sticking with inefficient and/or failing IT systems that slow you down. Or not being able to afford the tech that could really transform your business in these challenging times.
As we discussed in a previous post, trying to do IT on the cheap rarely ends well: you end up paying the price, one way or another. But investing properly isn’t just about how much you spend, but also how you spend it. In other words, it’s about budgeting.
It’s about looking at what technology you need, what you can afford, and investing in a sustained and strategic way.
We advise companies of all sizes, and in a whole range of sectors, on the best way to plan their IT budget. And although their specific tech needs vary hugely, we’ve found that a lot of the same, basic principles apply:
1. Take a look at what you already have
To develop a well thought-out IT budget, it’s vital to know what technology you already have – both the hardware you own, like work devices and network infrastructure, as well as any apps and services, including software licenses you’ve bought. Having a detailed inventory of your business technology makes it easier to identify the gaps that need filling, and avoid buying duplicates you don’t need. Of course, tracking every bit of business technology you own can be quite a challenge, so if your company is on the larger side it might be worth investing in some IT asset management software (ITAM). Having a full and up to date tech inventory will also be useful when it comes to renewing your company insurance i.e. you won’t need to scrabble round getting a list of your assets for valuation purposes at the last minute before your insurance expires.
2. Ask your employees what they need.
Keeping track of what IT everyone in your business uses is a massive help, when you’re working out what they’ll need for the upcoming year. But how do you know if the tech they’re using is working well, or if they’re missing products that could help them to do their jobs better? Well, the easiest way is to ask them. You might not be able to satisfy every request, but asking people to submit a short, 3-item wishlist will help you come up with a budget designed to boost your people’s productivity and morale, rather than just keep everything ticking over.
3. Budget for the future
It’s an obvious point, but one that’s easy to forget. Don’t just assume that if your business hasn’t experienced any major IT issues over the last year, you don’t need to tweak your budget. Think carefully about any upcoming plans, projects and goals your company has. If you’re going to take on more people, for example, you’ll need more devices and software subscriptions or licenses. And if your business is growing, you’ll need to invest in extra storage, to handle the greater volume of data you’re handling. Or if you’re planning a new IT project, you’ll need to budget for an extra engineer, fees to pay an IT Support company and then the additional cost of training for your current staff. As a minimum, your budget should increase year on year to track inflation and to hold in reserves the amount your insurance excess in case you need to make a claim for any broken or stolen hardware.
4. Look for ways to spend smarter
When you’re putting together an IT budget, aim to do more than just keep your current technology running. Think about your company’s goals – for example those in your business plan or IT roadmap – and consider how some smart budgeting could help you to achieve them. Because even if your budget hasn’t grown, you may find that you can now get more bang for your buck. Business technology is constantly changing, so there could be new products, services and solutions out there that help you to work better, while making your money go further. Moving your business to the cloud, for example, can be a great way to cut your legacy IT costs, while making remote working that much easier and more efficient.
5. Calculate your costs carefully
When it comes to IT, it’s easy to underestimate costs, so you get a nasty shock down the line. Some IT items, like payroll or devices, are easy to remember: you’re paying for stuff (including people) that you can see. But these days, businesses also have a lot of ongoing third party costs, like software subscriptions, cloud storage, web hosting and domain name registration. Make sure you don’t forget any of these services, or some of the less obvious costs associated with other technology purchases, like the cost of installing new hardware, or training staff in new software.
6. Ask the experts
If you don’t know your IT systems inside-out, it’s a lot harder to calculate how much you’ll need to spend on them over the coming year. How are you going to know, for example, what parts of your infrastructure will need upgrading or replacing? Every device has a finite lifecycle, and as technology changes, products can become less efficient, or even obsolete, without warning. So it’s often a good idea to involve a trusted IT supplier or support company in the budgeting process. They’ll be able to take a really informed and expert look at your tech needs over the coming year, help you to calculate your costs, and suggest ways to spend your money better.
7. Check out the competition
Admittedly, this isn’t so easy to find out but it’s helpful to know what other similarly sized companies in your sector allocate to IT, as a proportion of their revenue. While your investment in specific areas will differ from that of your competitors, knowing this can also be helpful – both to understand your priorities and identify areas where you might have been underinvesting. If your sector has a governing body or industry community they may have conducted research to ask their membership budgeting questions. So approach them and see if you can get this information.
Are you looking for guidance on your IT budgeting? It can be a minefield but with the right expert advice it could save your company not only money but days of lost productivity. Just get in touch to find out how we can help.