IT Budget Management & Planning: Avoid These 3 Mistakes
As 2014 comes to a close, IT organizations are reviewing areas for improvement, assessing staffing and assets, evaluating shifting trends and user demands – all with an eye toward the new year. Certainly, every company has different IT requirements. But when it’s time for budget planning, there are some general guidelines for what not to do.
Here Are the Top Three IT Budget Management Mistakes Your Business Can’t Afford to Be Making:
Delaying Your Digital Transformation
If you follow a calendar fiscal year, you are probably deep into the planning for your annual IT spending review and budget. Or are you? When it comes to IT planning, many IT professionals appear to be procrastinators. According to the Spiceworks' 2014 "State of IT Budget Report", 31% of the IT professionals surveyed have no standard budget planning date, and another 31% wait until the last quarter to begin their new-year planning. Not surprisingly, larger organizations tend to participate in more structured and proactive planning.
The Spiceworks report notes that in 2014, IT budgets averaged $253,389 and were distributed across four main areas: hardware (44%), software (31%), cloud (14%), and managed services. With the availability of new technologies, stricter industry regulations, and the increasing demands for secure remote access by multiple users and devices, that average is expected to increase for 2015 – which means there is a lot of money on the table if you plan ahead. As the saying goes, the best way to get something done is to begin. That goes for IT budgets, too.
Focusing on Reactive IT Processes
Day-to-day IT operations take a lot of time – and unsurprisingly, these tasks are disproportionate to the IT pros responsible for handling ongoing systems administration and fire-fighting. Companies with 250-499 employees have, on average, 4.8 IT pros on staff. Maybe that’s why IT professionals aren’t getting to their planning. With the recurring costs of staff salaries as well as warranties, space, power, outsourced services, and other components, IT operations represent a good chunk of money, too – more than half of the typical IT budget, according to the Spiceworks report.
Want to learn more about proactive, outsourced IT support? Check out this quick video:
So what’s the best way to approach a plan for IT? Keep an eye on these basic costs. Break them down first by month, then annualize them. And don’t forget to plan for emergencies too. You should have clear answers to the following:
Which resources are on-premise, and which in the cloud?
What disaster recovery and business continuity solutions do you have in place?
How many clients are you supporting, and what are their software / hardware needs?
Your strategy should reflect best-practice standards, and anticipate user expectations. The costs associated pale in comparison to the efficiency and transformative capacity if a thorough IT plan.
Failing to Optimize Your IT Investments
Your company relies on technology to keep the business running – not only for internal processes, but for customer-facing practices as well. If your IT is not aligned with your business processes and goals, though, business leaders will begin to view IT simply is a cost center – diminishing its real value. When IT professionals work with business stakeholders to understand how they use technology and their processes, that remaining IT budget can be put to work more strategically to provide significant benefits to the business: for instance, unifying communications and connecting an increasingly mobile workforce, automating business processes so that workers are more productive and efficient, and developing integrated processes and applications that improve the customer experience.
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