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We understand that creating an IT budget can be challenging for business owners for several reasons. In this guide, we want to help you make sense of things by walking you through your essential steps to budgeting in the most effective way.
Step 1. Identify your business goals and objectives
First, identify your business goals for the upcoming year and consider your IT provisions. By aligning your IT initiatives with your business goals, you can ensure your technology systems are working in harmony with your overall strategy. This will enable you to make strategic investments that deliver maximum value for your business.
When considering your future IT expenses, you should look back at your end-of-year technology audit because this will highlight where your current provisions sit. Jogging your memory on your original IT initiatives and how they are performing helps you consider just how much extra (or not) you need to provide as a further investment.
Step 2. Categorise your current IT expenses and determine your new spending
It's important to categorise your IT expenses to create an accurate and detailed budget. You can begin by breaking down your expenses into different categories: hardware, software, staffing, maintenance, training, and other relevant groups.
After categorising your IT expenses, the next step is determining your total IT spending. This involves adding up all the costs in each category to get an accurate and comprehensive view of your current IT budget.
This is great for two reasons; firstly, it helps you establish if you are overpaying or underpaying in areas allowing you to adjust accordingly, and secondly, it can help determine if there are outdated assets that could be sold off or traded in.
Step 3. Plan your new IT projects
From here, you can look at your overall business budget to see where funds can be moved to new IT projects to ensure you can meet your goals.
If you answer to stakeholders or business executives, think about how to gain buy-in for investments at this stage.
Ask yourself:
What do we need to achieve our goal?
Will this mean a bigger budget this year?
What do these projects look like, and how long will they take?
Where can we make savings that could fund IT updates?
Do we have assets to trade in or sell off to fund projects?
How will IT investments deliver value and efficiencies?
Step 3. Prioritise new IT projects and determine timelines
Once you've identified your new IT projects and have approval, the next step is prioritising them based on their impact on your business goals and objectives.
By evaluating each project's level of importance, you can determine which projects should be given priority and which could be postponed. This helps you allocate your IT resources more effectively, ensuring that you invest in initiatives that will significantly impact your results.
Prioritising IT projects also enables you to manage your IT budget more effectively, ensuring that you're making strategic investments that deliver maximum value and align with your overall business strategy.
Step 4. Allocate resources
After prioritising your IT projects, the next step is to allocate resources to each project based on their priority level, estimated costs, and expected return on investment. By allocating resources carefully, you can manage your IT budget more effectively, reduce costs, and improve operational efficiency.
Step 5. Consider ongoing costs
When creating your IT budget, it's essential to consider ongoing costs associated with your technology investments. These include maintenance, support, and upgrades for hardware and software and ongoing staff training. By factoring in these ongoing costs, you can ensure that you're accounting for the total cost of ownership of your technology investments, not just the initial purchase cost. This can help you make more informed decisions about where to allocate your IT budget and ensure that you invest in sustainable, cost-effective technology aligned with your overall business strategy.
Step 6. Evaluate and adjust
Creating an IT budget is an ongoing process; evaluating and adjusting it regularly is essential. This involves monitoring your actual spending against your budget, considering any changes in your business goals and objectives, and addressing unforeseen circumstances.
By regularly evaluating and adjusting your IT budget, you can ensure that it remains aligned with your overall business strategy and that you're investing in technology that delivers maximum value.
Remember that creating an IT budget is an ongoing process and requires collaboration between IT and business leaders to ensure alignment with overall business goals and objectives.
Our top tip for your IT budget
Don’t forget about your data!
Unfortunately, new IT projects can be prone to cyber-attacks, making transitioning business data from system to system precarious. To ensure you are remaining compliant and vigilant, it is a great idea to hire expert IT support. A great support team will know exactly which backdoors to guard, taking the stress out of your upgrades.
Looking for IT support for your data transition? Contact Eric today!