Many IT leaders are reticent to spend major amounts of time on budgeting. Other concerns, such as mounting worries over data breach scares, a focus on innovation and internal change, and other seemingly more pressing matters can often obscure the need to strategize and prioritize the division of IT funds.
Of course, ignoring the budget or simply modifying last year’s financial plan in lieu of proper changes, is not wise for your business. Your IT budget sets up the framework for what areas of your business you’ll be focusing on in the coming year or quarter. It should be tweaked, sized, and modified to your exact specifications — subject to the overall goals you have for your business’s growth.
Troy Drever, a Calgary-based managed IT services professional with Pure I.T outlines the top considerations you should be making as your plan your IT budget. But first, here are the basics of IT budgeting.
What Is IT Budgeting and Why Is It Important?
All departments within a business require their own funds, and IT (information technology) is no different. The allocating of monetary funds to your business’s IT department is not only essential to the IT department itself, but it is also critical to all other departments as IT inevitably supports each sector of your business.
IT budgeting is often carried out annually. If you have numerous IT projects or initiatives popping up throughout the year, your budgeting may take place before and during each of these events. Alternatively, you may choose to plan your IT budget quarterly or at the half-year point every year.
However you choose to budget your IT department, it is certainly an essential task that requires in-depth thought and planning. Many department heads and C-level executives should be involved. IT budgeting is not simply about keeping your computers and software programs up and running. It’s about looking for those IT-related projects that help uplift your business overall and increase your ROIs as you progress and grow as a company.
Tips for Creating a Successful IT Budget
#1. Start with your last budget
The starting point for any IT budget should be the last budget you drafted and approved. As soon as that budget is up and running, it’s time to start planning for the next. We recommend reviewing this budget at least a few months before your next budget will come due.
#2. Learn how to defend and sell your budget
Depending on the framework and mentality of your business and how it values and approaches IT, you may need to do a great deal of justification and selling. Your ability to do this will rest largely on your ability to explain the ins and outs of each budgetary need. Don’t wait until the budget is due to outline your goals. Start making your arguments now — explaining the purpose and impact of each and every line item.
#3. Know what your IT department is capable of before hammering out desired initiatives
When asking for funds, it’s easy to get wide-eyed and covetous of every dollar you can get. In fact, the goal of your budget should not be to absorb all-possible funds. Rather, it should be to prioritize your IT department’s initiatives and your overall company’s goals. Use these objectives as your guiding light, and only request the amount of money you need to get the job done. In a way, too many funds can actually hamper your goals and make it much less likely that you’ll be funded properly in the future.
It’s time to update your company’s IT budget. Do you feel confident about moving into the next cycle? Use the above as a guide when planning for the allocation of your IT funds. By setting aside the proper time and resources for this process, you’ll ensure adequate funds to reach your IT department when they’re needed.
Author’s Bio: Stuart Crawford is the managing partner for Ulistic LP. Ulistic LP is a 10+ year old business development and marketing agency for managed IT service providers in Canada, Australia and the United States.