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Best IT Budgeting Practices for Your Business

By March 26, 2021 No Comments
IT Budgeting Practices for Your Business

Many IT leaders are creating a new IT budget for 2021. This year will bring new budget challenges for most of the IT leaders. 2020 was a tough year for most businesses. Most businesses have lost a lot of money in 2020. However, the importance of IT has increased due to the coronavirus pandemic. Most workers are working from their homes now. Thus, IT leaders need to consider various factors before creating their IT budget.

Telework is booming due to which the service desks need to deal with more tickets. It is important to look for ways to optimize the current IT costs. IT leaders need to find the items that they can eliminate from their IT assets. In this article, we are going to share some practices that will help you in creating a perfect IT budget for your business.

  1. Forecast your IT budget growth

Budgets in 2020 were expected to increase by more than 1%. However, IT budgets actually decreased by 8% in 2020 due to the coronavirus pandemic. According to a report from Gartner, the IT budget might decrease by 5.1% in the next year.

There are various factors that you need to consider before creating your IT budget. You should think about the growth needed to ensure that your salaries are competitive. Also, you need to think about the licensing price and new hardware.

  1. Evaluate your hardware and asset inventory

You can’t create your IT budget until you know about the assets that you own. Thus, you should create a list of IT assets and hardware that you are using. This problem can be solved by using IT asset management. It will help you in solving most of the important questions.

IT asset management software will help you in tracking license expiration, hardware, licensing compliance, and software. It will integrate with the ITSM activities. This tool will automatically mark all the locations of your IT assets. It will help you in marking both digital and physical assets. You should evaluate your asset inventory before creating your IT budget.

Make sure that your vendors have delivered on their commitments. SLM or service level management is a very important part of contract management. You can use this data for ensuring that your vendor relationship team has all the relevant information. They should know about the vendor’s performance as it will help you in negotiating with the vendors.

  1. Create your budgeting timeline

You should create specific goals and a timeline for your IT budget. Make sure that these dates account for service desk metrics. Your timelines should be flexible as you might need to make some changes. For example, pandemic planning and expansion into new markets can shift your timelines. Thus, you should ensure that your budgeting timeline is flexible enough.

You should set specific dates when the IT budget should be implemented, reviewed, and drafted. Make sure that you can schedule reports that will show you actual year-to-date spending. It will help you in allocating budgets to different departments. You might need to make new changes to your project. This is important when your IT department is trying to tackle some problem. Also, your IT budget can change after the hiring process.

The best way to optimize your IT budget is by setting goal dates for your specific projects.

  1. Create key budget management roles

The IT budgeting best practices are similar to the change management best practices. Change management will help you in specifying roles. You need to assign roles during every change process. This will help you in creating a system of checks. It will ensure that all your employees are working optimally. You can apply this idea the budget management and creation.

You should look for someone who can help you in auditing your IT budgeting. This can be both an internal auditing group and an outside auditor. You can also create a task force for solving this problem. This task force will help you in auditing and reviewing your IT budget.

Make sure that you are including CFO and CIO before approving your final IT budget. You should talk with multiple stakeholders before creating a final budget.

  1. Outline both long-term and short-term objectives

You should first outline both the short-term and long-term objectives of your business. These objectives will help you in shaping your IT budget.

Long-term goals will include things like digital transformation, hiring of new members, future upgrades, and implementation of ITSM software. Short-term goals will include various factors like cutting costs and projects with fast turnaround time. Make sure that you are saving some of the budgets for doing innovative things.

You should also consider short-term investments. There are many short-term investments that will help you in impacting your mid-term budget. It will help you in reducing your costs and increasing your ROI. For example, you can implement a self-service IT platform. This will help you in reducing the number of tickets. Thus, it will help you in maximizing your ROI.

Make sure that you have defined both short-term and long-term objectives. This will help you in quickly evaluating the tools that will help you in accomplishing your goals.

  1. Develop Contingency plans

It is impossible to predict crises like coronavirus pandemic. Thus, it is important to ensure that you are ready for future crises. IT leaders are using coronavirus pandemic for learning about a lot of things. The coronavirus crisis has helped companies in learning about their weaknesses. Budget contingency plans have become a necessity for every modern business.

You might think that the budget contingency plan will help you in mitigating crises like fires, earthquakes, and pandemics. However, contingency plans can help you in saving your business from other crises also.

Budget contingency planning will help you in giving more flexibility to your projects. It should account for the cost of resolving disruptions like hacking attacks and data breaches. Make sure that you have thought about all the “what if” scenarios. This will help you in protecting your IT leaders from stress.

Conclusion

These are some tips that will help you in creating a perfect IT budget. You should take some time to create a perfect IT budget. Start by evaluating all the tools that you are currently using. It will help you in optimizing your IT budget according to your needs. The simplest way to optimize your IT budget is by working with a good MSP. Experienced MSPs like Bleuwire can help you in handling most of the common IT work. They will help you in protecting your business from attackers. Also, they will help you in resolving all the IT queries. This will ensure that you don’t need to worry about hiring more IT professionals for your business. If you need more information regarding IT services, then you can contact Bleuwire.

Contact us today to learn about Bleuwire™  services and solutions in how we can help your business.

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