Many small-medium businesses ‘wing it’ in the area of IT planning and budget. Upgrading as deemed necessary when equipment fails, or a tech crisis occurs. Managing an IT budget is more than holding down spending or cutting costs when possible – especially if you want your IT to improve your employees efficiency and effectiveness or get a step ahead of your competitors in delighting cutomers.
IT budgeting was once a guessing game ‘which area of the IT budget will likely be approved?’ Not anymore, there are too many risks doing business online to skimp on the IT budget.
Start With a Known Quantity
Your IT budget covers hardware, apps, support and will vary for each department. To provide a basis for review, set a baseline. Look at your IT budget, focusing on areas that require some serious changes.
Look from the outside in, what is working, what should be working but isn’t, and what are the gaps. Most importantly how does you IT fit with your business objectives. Looking at things from a different view, you may see a different approach is necessary to review your IT budget.
Training
Look at the IT training budget and at what the training schedule looks like. Does the budget cover IT training that is necessary to keep things running smoothly? Expenses for IT training is sometimes underfunded as it is often seen as discretionary and only spring for minimal training. At a minimum you need to fund some level of cyber-security training to keep your data and finances safe.
“Every single business action requires an IT action. There is no such thing anymore of those two being separate. TBM and the ability to cut cost is helping us switch those dollars to where they’ll matter the most—to the business.” —Philip Bame, VP of Global Delivery IT, HPE
With new trends in technology, IT skills in shortage, skimping on IT training budget could become a company’s downfall. To stay abreast of the fast pace of technology staff, your IT department with highly trained personnel. IT budget matters, it is more than keeping the lights on.
Why Is There A Shortfall In IT Budgets?
Start-ups often run as lean, mean, cost-cutting machines to weather the competitive world of online marketing. This mindset is often successful until it is not. CEOs and owners have to move into the business growth mindset or be last on the ladder of success.
It is easy to fall into that quagmire of recycling last year’s budget over to this year’s budget, nothing is looked at individually. One portion of the IT budget where there should not be any skimping is cybersecurity. One successful cyberattack your company is gone, the cost of recovery is too destructive to bounce back.
Review all the items in your cybersecurity network and adapt your budget to cover any needs that may arise. According to a survey, 3.2% of your company’s total budget should cover your IT funding needs. Bear in mind this is only an industry average and is not a set in stone figure. It is no longer acceptable to run with last year’s IT budget; there are too many variables that need enhancing to ‘wing it.’
Sources
Koger, Scott. “IT Budget Management: Setting Direction and Strategy.”
emerge/The Home of Technology Business Management (TBM) June 19, 2019
Shacklett, Mary.
“Five major IT budget mistakes you never want to make.”
ZDNet. October 1, 2015
Gray. Patrick
“IT budgeting: A Cheat Sheet” TechRepublic
September 4, 2018
Posted By Staff.
What Percentage of Your Company’s Budget Should Be Allocated For IT Operations? LeapFrog. July 30, 2019
