Make sure you prioritize your highest needs first when budgeting for new IT tech.
Technology is rapidly changing, and businesses of all sizes need to keep up with the trends if they’re going to compete. Numerous factors like data analytics, cloud-based computing, mobile devices, machine learning/AI, and the Internet of Things (IoT) change the ever-increasingly interconnected landscape of business technology.
When remote work became the norm, some companies may have over-invested in IT tech and resources, and now they have too many tools. Concerns included keeping track of IT assets that weren’t all located in a traditional office setting and maintaining cybersecurity. Businesses that didn’t invest enough might still be playing catch-up and don’t have enough tools or business software to help expand.
IT managers at small and mid-sized businesses are often faced with making hard annual choices by asking one question: What can we live without? Find the answer by looking at our seven practical tips on how to budget for new IT tech and resources.
Make an IT budgeting plan
You have a dream budget and a minimal budget in mind during the budgeting process. Based on hard data and forecasting, the actual budget you get approved for is probably somewhere in between. Start with this year’s budget as a baseline, and then determine where (and if) you can save costs to give you more budget for next year.
The next step is to prioritize your company’s immediate needs that you must have next year. Do you need more staff? Do you need more tools to make your current team more effective? Can you automate and save on labor costs later?
Perform a software needs assessment to determine what level of investment fits your business model. What trends did you notice in the past? Where is your industry going? Was there software that was too expensive a few years ago that is more affordable now? Completing this assessment leads to product research for your new IT tech and resources budget.
Research your options
Understanding what’s out there for you to invest in (software, more staff) is only part of your IT tech and resources budget formula. IT managers must take into consideration every aspect of the investment.
How soon will your investment pay off in your IT tech budget? How does your budget save the company money? How will you, as an IT manager, show ROI?
No matter the budget, every company invests in capital improvements or staff based on what those resources return on their investment. An IT department’s assets are no different when you’re narrowing down your choices of what to spend money on next year.
Assess strengths and weaknesses of every choice
Now that you have prioritized what must come first, it’s time to delve into deeper research to narrow your options even further. You can create simple charts or spreadsheets to assess the strengths and weaknesses of each choice. You could even make a weighted scale or point system to tally up what selections come out on top.
For example, your priority is the security of your IT assets because 90% of your staff works remotely. Therefore, you decide to invest in an artificial intelligence platform to encrypt and enhance your security measures to keep your company’s data safe in cloud-based working environments. You look at the top five programs in this area, and you keep a tally sheet to narrow down which one is the best option for your budget.
Don’t forget to factor in hidden costs and upfront costs versus long-term returns. Paying for new software now might be a relatively large expense, but your ROI can pay off hugely over time when you budget your IT tech or resources properly.
Determine your ROI
When you examine the ROI of your potential investment, you need to assess more than just the costs versus the benefits. You have to look at current industry best practices, when and if the product will become outdated, and how much support you can expect for the product in coming years.
Can your chosen asset be upgraded? Whether hardware or software, upgrades are usually cheaper than buying brand-new ones. Don’t be afraid of purchasing used or wholesale computer equipment if it’s cheaper to upgrade them or newer equipment isn’t tenable right now. Look for certified refurbishers who bring used equipment as close to modern specs as possible.
Future-proof your investment
Ask vendors how long their products will last. Are your chosen IT tech tools going to be able to grow with your company? Are IT tools upgradable after five years? What about ten years? If your telecommunications infrastructure needs more equipment, can your devices and software keep up?
Future-proofing IT tech tools and resources are more than asking a vendor how long they expect each product to last. You must also assess where your company will be in the coming years.
Establish timelines for implementation
Once you purchase your assets or invest in staff, determine when these investments will come online. How soon before your business starts to see the benefits of your purchases?
Your IT tech and resources budget should include an implementation plan. You’ll have to phase out the old tech if you’re scaling up new tech. Can you accomplish this in stages to minimize disruptions? Or is it better to upgrade everything all at once across the whole company?
Consider outsourcing some aspects of your IT
Although you probably want to maintain control over your IT assets and resources as much as you can, don’t shun outsourcing some aspects of your IT tech. Sometimes it’s just cheaper that way, and you might be able to realize discounts by signing yearly contracts as opposed to month-to-month ones.
Common choices for outsourcing your business software needs include database management, web hosting, machine learning, and data analytics tools. You might find that some chosen vendors are very, very good at what they do. Investing in an outsourced asset can free up more budget space for IT assets you still want to keep in-house.
IT tech is a necessary investment.. Yet you must protect your company’s bottom line by having the right tools in your arsenal to ensure your company stays at the forefront of technological upgrades that can keep your firm competitive with your target audience.