How to build your IT budget for 2020

How to build your IT budget for 2020

As your business moves towards automation and becomes more digital, your IT department will have a bigger role to fill. This means you’ll have to plan in advance for network changes, new technology investments, and increased software training. In short, IT strategies that may have worked in the past might not fit your business model anymore.

An integral part of your plan is a budget that outlines how you will spend money to reach your goals. Ideally, you should prepare a new IT budget each year.

With that in mind, here are tips that could help refocus your IT budget for 2020:

Review last year’s IT budget

To determine where you want to make changes, review last year’s budget. Let’s say you spent money on equipment, such as computers, or a new server. You can check whether you need to upgrade or change your hardware. You can also use last year’s budget to find out recurring expenses.

Common recurring expenses include:

  • Cloud storage fees
  • Software license renewals / Software-as-a-Service (SaaS) subscriptions
  • URL registration
  • Content management system fees (CMS)

While you’re gauging your budget, don’t forget to factor in Windows 7 End of Life on January 14, 2020. As a business owner, you must consider transitioning to Windows 10 because Microsoft will no longer provide security updates, support, and customer service for Windows 7. It helps to create a to-do list to prepare for this.

Determine your needs and wants

After you’ve identified budget gaps and opportunities, make a list of IT components you need based on your budget. Consider equipment and software that are critical to your operations, such as desktops, wireless routers, servers, operating systems, and productivity software.

Also keep in mind the following criteria when creating your list:

  • Who is responsible for handling and maintaining new items
  • Integration requirements with other devices, if any

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Drafting a comprehensive list will help you prioritize items in the procurement process.

Consult with other departments

Your IT department does not operate in a silo. Its processes will be affected by other teams in your organizations and vice versa (such as when your IT department sees room for automation or transitioning to a digital process for another department). As such, consult with other departments to know their plans and align your IT budget.

For example, if the HR department wants to invest in HR management software, which department is paying for that purchase? If there will be additional costs for project management, staff training, maintenance, implementation, etc., which department (or departments) will take these on?

Prepare to explain vendor price models

Cost overruns in items such as cloud services are partly due to the inability to understand the complexity of vendor price models. To avoid this, you should provide a clear-cut price model that you can explain to upper management

Track data to measure ROI

Every department needs to analyze their budgets to make sure they’re on track and to record expense patterns. Your IT department should pay attention to this particularly when it comes to ROI.

For instance, you can determine if you’ve saved money from a big technology investment by tracking productivity metrics using appropriate analytics tools. A successful expenditure — i.e., one that helps your bottom line — can justify funding more projects in the future.

A well-thought-out IT budget will save you the trouble of an unnecessary investment. If you have limited experience with IT budgets, you should partner with an experienced managed service provider (MSP) like Charles IT to assist you in finding hidden costs and making accurate predictions. Call us today and we’ll help you create a solid budget for the coming year.