IT budgeting can be a daunting task, even for seasoned business owners. We all know the feeling of dreading the budgeting process, but it’s a necessary evil that we simply can’t avoid. Many planners fall into the trap of recycling last year’s plan, year after year, without taking a strategic approach.
Instead of repeating what you did last year, and frankly years and years before that, take a fresh look at what you are doing. As a business leader, you understand the critical role that IT plays in driving growth, efficiency, and innovation within your organization. In this blog post, I highlight the areas to consider when strategically planning your IT budget.
Areas to consider reviewing when planning your IT budget:
Security – My guess is that you are not investing enough in your security. Now just admit it and invest appropriately. Security budgeting can be a money pit unless it is managed effectively. Just because you can do it does not mean you should do it. You need to justify each security item with a business case. Many of the options are a must-have (firewall, MFA, anti-virus/spam, etc.) but some options like penetration testing, SEIM, Compliance, etc. are great to have but the investment may not be worth the associated risk and there may not be a business case to justify the expense.
Review Your Telephone Bills – If you can make it through all of the confusing content, run the numbers to ensure you are paying for what you need and are getting the best possible pricing. Simple but effective. We have brought on new clients and have reviewed their phone bills and ended up saving them thousands of dollars a month. Worth the time!
BYOD – Are your employees using their personal cell phones or laptops? It’s time to reevaluate the process and ensure there are no hidden costs or risks involved. While Bring Your Own Device (BYOD) may seem cost-effective at first glance since you don’t have to purchase hardware, it can be misleading if the savings are overshadowed by lost productivity. Take, for instance, a scenario where an employee’s laptop gets stolen, and they opt not to invest in a new one, resorting to using an outdated device that is slow and unreliable.
Software maintenance – Do you really need the annual maintenance on a specific software or are you missing a plan for one that you actually need? Look into that. No one likes paying the annual maintenance fees on something you own but without it, you may not receive critical security updates. Trust me, paying the annual maintenance fee is laughably low compared to paying for a hacking incident.
Hardware maintenance – You definitely need this, but at what point does it make sense to stop it? As hardware ages, the manufacturer does not maintain parts and does not want to support it any longer. We have seen times when the annual maintenance was about the cost of a new device! For some networking hardware, it may be more cost-effective to buy an extra device to sit on a shelf pre-configured and ready to go if ever needed rather than maintaining annual maintenance on all of the like equipment.
Technology Management – No one likes the up-and-down billing of utilizing technology support from a 3rd party firm. There are many advantages to utilizing a fully managed technology support plan, but for the budgeting and cash flow process, it makes this very easy since it is a fixed monthly fee. No ups and downs to worry about unless you are contemplating a new initiative. With the Waident Managed plan, you get a cost-effective fixed monthly fee and receive unlimited support and management which happens to make your billing and budgeting process easy.
Cloud – If you are using the public cloud (IE: Office 365, Google, Amazon AWS, etc.) be sure and do a deep dive into that billing. For many of the platforms, if you commit to a certain amount of services and activity, you can save a lot of money. We have a client who saved nearly $10,000 a month by committing to a one-year term for using the same services they had been for the past 2 years. No reason it would decline, and the cost savings were substantial.
Your Team – Is it better to outsource or insource? Not just the costs, but also the advantages and disadvantages since there will be associated costs as well. There is no one-size-fits-all all. Challenge your assumptions with metrics to come up with a plan.
Now that you have identified the key areas to consider, it’s a good idea to start your budgeting process a little earlier. Next year’s exercise should be easier if you follow the same process.
