IT budget planning for 2024

6 December 2023

Having an IT budget is essential for financial planning and enables you to make more informed business decisions. It allows you to track your expenses, prioritise your spending, reduce unnecessary costs and identify areas of insufficient resources which can affect business growth and potentially expose your company to risk. Being more proactive with your IT budgets can encourage IT investment that adds value to your business and aligns with your goals. 

We recommend having a short and long-term budget, covering at least the next 12 months and longer where possible. To help you create your IT financial forecast, here are 10 steps to consider: 

1. Analyse your business goals 

Consider both your long and short-term business goals and identify what type of technology investments are required to keep those goals on track. Are any of your business goals being negatively impacted by IT? If so, this should be one of your priorities.

2. Identify recurring expenses 

There are many ongoing costs that will form the basis of your IT budget: 

  • Managed service and maintenance contracts  
  • In-house IT staff 
  • Hosting costs for servers and cloud tools 
  • Licensing and subscriptions 
  • Backups and security (remote backup, firewalls, anti-virus) 
  • Telecommunications (internet, VoIP) 
  • Utilities such as power consumption

3. Audit your IT hardware 

Auditing your hardware provides multiple benefits, including the ability to ensure your systems meet the required level of security compliance and being able to analyse your past spending. Maintaining a detailed audit of your devices and infrastructure ensures you know exactly what you have, helping to prevent unnecessary purchasing, aid planning in terms of recruitment and allow you to budget for warranty expirations or when equipment may require replacing. Having a clear picture of when hardware needs to be replaced or upgraded means you can plan this ahead of time and spread the cost.

We’d recommend maintaining an audit and continually keeping it updated. You can use an automated asset management tool to reduce the time spent on this process.

4. Establish your entire organisation’s priorities 

As an IT or Network Manager you’ll have a clear idea of where your IT strategy requires extra funding and what’s working well, but other members of your organisation will have different views and opinions and it’s important to communicate with all teams as far as possible, to gain insight and proceed with a balanced approach.  

Getting everyone’s opinion and acting on their feedback will not only help you to build great relationships but will have a positive impact on IT for the whole organisation. Other colleagues may be better placed to inform you of plans that may affect IT budgets such as recruiting extra staff members that require equipment or moving to bigger or additional premises. Perhaps you are paying for licenses that are no longer required by a particular team, allowing the licenses to be reallocated or cancelled to reduce costs. Other team members may also raise issues that are impacting their work or making them less efficient, and you can help to resolve them. 

5. Audit your present and past IT budgets 

Reviewing the IT budgets from current and previous years, allows you to establish a baseline, which you can then work from, considering any anomalies from those years and what you expect to achieve in the coming year. The needs and demands of what you require from your IT infrastructure will change over time as your business evolves and grows, which may instigate an increase or decrease in your IT budget. 

A comprehensive IT audit of your past expenditure, including hardware, software, licensing and contracts, can also help you to evaluate whether expenditure is having an impact on your goals. Reducing unnecessary or low-impact costs and regularly reviewing your IT budget will allow you to make more informed financial decisions based around your objectives.

There may be areas where costs are excessive and a cheaper alternative would be suitable, whereas other areas may need additional investment to meet your business aims. Whilst we advocate reducing unnecessary costs, it’s never worth the risk of reducing expenditure on things that are going to cause further problems later, for example, reducing maintenance plans might seem like a good cost-saving exercise in the short term, but can be detrimental in the longer term. 

A review of this type may also identify a trend in your unexpected costs, which you may wish to investigate and if the situation can’t be mitigated and is likely to reoccur, these costs can become part of your planned expenditure.  

6. Plan project expenses 

If there are any large projects upcoming, such as infrastructure upgrades or moving to a new office, consider all aspects of this and plan your budget accordingly. Areas to consider are any additional IT support that may be required, installation, hardware, licensing and training. 

7. Cyber security  

We recommend all organisations invest in cyber security to protect from cyber crime. The basics such as disaster recovery and endpoint protection should be on your recurring expenses as mandatory, but if there is extra funding available, using this to provide cyber security awareness training for your colleagues would be recommended. Depending on the size, complexity and regulatory requirements of your organisation, periodic penetration testing can be implemented. 

8. Use your data  

Where it’s available, use data to make informed decisions about your IT budget and to demonstrate your reasoning. Where you are looking to make changes for cost saving purposes, gather information on the costs of both the current solution and the new proposal as well as the benefits of the new system. Your IT support partner or third-party vendors that you are working with may have statistics that they can provide to help with this. 

9. New technologies 

Allocating resources to embrace new technology can help you to remain competitive and a step above your competition. Innovative technologies such as AI can provide benefits such as productivity and cost-saving when used to its full potential, but these will require investment before you start to see the benefits. 

10. Consider outsourced IT support 

Partnering with a managed service provider can benefit your organisation in many ways, particularly cost saving. With tailored packages and many different options, you only pay for the IT support that you need, and you will have a fixed monthly cost for this. In addition, partnering with an MSP gives you access to lower cost technology solutions and enterprise level technology via their partnerships and relationships with suppliers  

A good IT partner will also be able to help you with your IT budget and strategic planning, which should include upcoming costs and recommendations that help to achieve your business goals and keep you up to date with the latest technology. 

If you’d like to book a 15-minute consultation to discuss your IT budget, please contact us here to book your appointment. 

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