5 Steps to Creating the Perfect IT Budget
Like other aspects of your business, your IT infrastructure needs a budget that describes how you will spend money to reach your goals. Ideally, you should make a new IT budget each year.
During some years, you may not make any changes to your budget. During other years, though, you may need to drastically increase or decrease the amount of money that you spend on IT.
Follow these 5 steps to create the perfect IT budget for your SMB’s short-term and long-term goals.
1. Review Last Year’s IT Budget
If you made an IT budget last year, review it to determine where you want to make changes. If you spent money on new equipment, such as desktop computers or a new server, last year, then you probably don’t need to buy those items again.
You can also use last year’s budget to find recurring expenses easily.
2. Know the Cost of Your Recurring Expenses
Certain IT costs won’t change much from year to year. Some common recurring IT expenses include:
- Cloud storage space
- Renewing software licenses
- URL registration
- Content management systems
Your recurring costs may differ from those of other companies. Take a close look at how your business spends money so you can identify recurring expenses that you haven’t included in past budgets.
3. Take Inventory of Your IT Equipment
Make a list of your IT equipment and how old the items are. Once you have a completed list, you can decide whether you need to update your equipment.
You have some discretion when it comes to how often you update your IT equipment. Most companies purchase new desktop and laptop computers every 3 to 5 years. A 5-year-old computer may seem to work well, but it probably can’t keep up with the speed of newer models. Hanging on to old equipment, therefore, could lower the productivity of your employees.
Other pieces of technology that you might need to update include:
- Servers (about every 3 years)
- WiFi routers (every 4 or 5 years)
- Mobile devices (every 2 or 3 years)
If it’s time to upgrade your IT equipment, then you need to create a line for that expense. If you don’t need any upgrades, then you can reserve your money for when the time comes.
4. Talk to Your Employees and Managers
Your employees and managers may have a better idea than you do about what upgrades you need. After all, they’re the people who use your equipment and applications daily.
Take some time to talk to your managers and employees to learn more about what they would like to see in next year’s IT budget. If you hear the same requests from a lot of people, consider adding a line to your budget. Of course, you shouldn’t feel obligated to fulfill the whims of a few people. Only add the expenses if you’ll get a good return on your investment.
5. Plan for the Future
This year’s budget should include a line for research and development that will improve your companies ability to compete with other businesses in your industry. Depending on your industry, this may include things like:
- Sending managers to IT conferences to learn about upcoming products
- Hiring coders to update proprietary software
- Improving your IT infrastructure security against the latest cyberthreats
Researching your future needs will make it easier for you to predict your IT expenses over the next few years.
The perfect IT budget ensures that you spend money wisely while you update your SMB’s technology. You can take a stab at making an IT budget without outside help, but you run the risk of missing an important line item.
If you haven’t made an IT budget before, then you may need to hire a consultant to help you find hidden costs and make accurate predictions. We’re more than happy to assist you with creating a solid budget that will accurately account for your expenses.