A new year often means beginning again with a clean slate. After the excesses of the holiday season, many of us seek to improve our health and our habits. For many businesses, however, a new year represents an opportunity to grow and increase profits. Companies that worked diligently to establish a budget for the coming year will have a more clearly defined path toward success. Still, most companies don’t have a finalized budget early in the year. The final quarter of the previous year will determine adjustments in the new budget. If your company hasn’t finalized its budget for the new year, you still have time to make modifications.
The Purpose of Your IT Budget
It can be tempting to treat your budget as a formality and simply do what you have always done. Just remember the old adage: if you do what you’ve always done, you’ll get what you’ve always gotten. Instead, view your budget as a roadmap and a strategic approach to achieving your business goals. By forecasting your projected revenue and planning for costs and expenses, you will be better prepared for the inevitable ups and downs a year brings.
A budget allows you to establish a target for profits, giving you an effective measure of progress as your year moves forward. It also allows you to plan for your technology needs, which could be a significant investment without careful planning.
Budgeting for IT
Arguably, one of the biggest variables in your overall budget is that portion dedicated to your company’s IT needs. New equipment, updated technologies, and planned maintenance and upgrades are all considerations that you must assess.
While it might be tempting to lighten up your IT expenditures, it helps to recognize that technology has both a cost and a value. Tech can help your business to run more efficiently, so don’t skimp on the budget for these items. What tech may cost you overall may have greater value to your business than you realize.
How do you spend strategically for IT? Begin by assessing the Total Cost of Ownership (TCO) for your tech investments. TCO takes into consideration the initial expense of specific technologies and balances that against the benefits your business receives from that expense. One way to stay on top of your tech budget is to purchase technologies that increase company value. These can include wireless infrastructure, cloud technologies, and licensing models that fit how your company uses software.
Seek Expert Advice
For all of the hard work that you put into developing your budget, there may be areas that aren’t fully defined. It’s common for IT to fall into this category, particularly if you are unsure about the technologies available to you. Fortunately, there is guidance available.
An IT provider can help you to determine the best course of action for some of the gray areas in your budget. Because technology should help to strategically achieve your goals, your IT provider will examine IT expenses through a lens of:
- Common, specific, or one-time expenses – each element in your tech budget will fall into one of these categories
- Historical data – examine the expenditures related to your tech and look for patterns
- Ways to maximize the results created by these expenses – some of the technologies in use in your business may have multiple applications
In addition, consider the ways your staff uses technology and make decisions based on that use. Decide what you need and stick with it; switching among varying technologies can ruin your budget in terms of expense and efficiency. Select licensing and support agreements that maximize efficiencies, and adopt processes that help to boost performance.
If all of this seems overwhelming, your IT provider can evaluate your current technology and make recommendations to prioritize your expenditures. Contact Lieberman Technologies to get started!