Having a keen understanding around where and how to spend your IT budget can not only be a defining moment for your organization as the new year arrives, but also a grave challenge in many ways.
For instance, you must fine-tune what you can squeeze out of an already tight budget and yet still have enough money to dedicate towards digital transformation, cyber defences, product innovation, and what have you.
Whether you’re a startup entrepreneur or the CTO/CIO of a well-established company, creating a budget to help you successfully transition from 2020 and 2021 is critical to ensuring that the cogs and wheels of your business keep turning smoothly.
Here are five IT budgeting practices we recommend to help you prepare for the year ahead:
1. Plan your short and long-term objectives
As an Orange County IT services provider, one of the best practices we recommend to any business is that the final budget must account for more than just simple-line items – i.e. it should consider both short and long-term objectives of the IT department in general.
For instance, in terms of short-term goals, these should take into consideration a variety of factors such as immediate cost-cutting, making the team’s transition from remote to office work, taking on more projects with fast turnaround times, and so on.
In terms of long-term goals, the push for digital transformation should be considered, the possibility of bringing new team members onboard, and any future upgrades needed for the hardware or software environment.
2. Identify budgeting timeline through specific dates
Much like change management, specific dates and goals must be set around your IT budget. The dates should account for service desk metrics – being flexible enough to accommodate major changes such as new market expansions or pandemic planning – while also being structured enough to prevent service disruptions.
In addition, you should set specific dates so as to when the IT budget should be drafted, reviewed and put into effect.
3. Determine your projected increase in IT budget
Since the pandemic, IT experts and leaders who had initially expected a budget boom have had to, unfortunately, revisit their expectations. For instance, IT spending fell by 8% in 2020 according to a Gartner report.
It may seem almost impossible to forecast projected growth or shortfalls in your IT budget, but doing so will certainly keep your department stable. Plus, you would need to consider the growth required to keep salaries consistent as well as competitive, and the additional costs to cover increases in licencing costs.
4. Set budget management roles
The best change management practices and IT budgeting practices actually have a lot in common. With your respective budget planners, managers, and contributors and coordinators working collectively to set a budget, you should also have someone to objectively audit your IT spending on a periodic basis.
5. Budget contingency plans
We never saw the pandemic coming or the havoc it would wreak on IT budgets. But now that it’s here, IT leaders must develop budget contingency plans to help deal with service disruptions and other “what if” scenarios.
Our Orange County managed IT services team can help you implement all the above and much more.