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6 Tips for Setting Your IT Budget

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As your business moves forward and grows, you might need to sit back and review your IT budget. It’s important for any business to have a budget for tech resources. An IT budget is particularly important if your company has grown significantly over the past 12 months, you’ve planned some exciting new tech projects like an eCommerce site, or you just really need new computers.

As the role tech plays in business processes grows, your IT budget needs to be as accurate and comprehensive as possible. A solid budget also helps you explain your planned IT expenditures to your managers and colleagues, and make a positive case for the tech resources you need in your business. These tips will make it easy.

1. Review your IT plans and processes from the previous 12 months

Before looking forward, it’s time to look back. If you’re working with several different IT providers, they should each be able to provide you with a summary of services for the past year. Combine these descriptions and figures with any purchases or services you’ve acquired on your own and put everything in a single document.

Take the time to recall which parts of your IT you loved, and which parts you hated and want to ditch next year. What was simple and efficient, and what caused you the most stress? It might be time to ditch the IT provider that’s not meeting your needs.

2. Figure out what you spent last year

Pull your financial data from your accounting software or have your current IT provider send it to you. If you’re a TWT client, we’re happy to email you this information. We sit down regularly with clients to help them plan and prepare for upcoming expenses. Put all your data in a spreadsheet and tally it up.

Because some of your expenses won’t change, create a new file and import the previous data. Start adding in projected costs for this year and deleting services you intend to remove. Remember to include everything: internet services, VoIP phone, printers, computers, smartphones, software licenses, cloud services, email and web hosting, and equipment leases.

3. Make a list of the tech you need vs. the tech you want

It would be nice to get a new smartphone for each staff member, but unless they’re malfunctioning or broken, this might not be the best place to spend your money. Instead, you may want to replace the four-year-old server that’s about to die, or explore moving your storage to the cloud.

Choosing the cloud means cutting down on server maintenance costs. You could then funnel those extra dollars into forward-thinking technology for your business.

At the same time, your whole IT budget shouldn’t just go towards keeping your operation running, but also towards refining your business processes, encouraging growth and making you money.

4. Conduct an ROI Analysis of each item on the list

IT can be costly upfront, especially when you’re purchasing hardware. It’s important to analyze the ROI for each of your project expenditures. Some of the benefits may be harder than others to quantify.

Over time, many of the IT services you buy will pay for themselves. For example, if you purchase hardware to replace outdated and painfully slow hardware, even the increase in efficiency among your staff could end up paying for it. Generally, faster computers and networks mean more productive employees and more billable hours.

More reliable technology is also a way to attract more customers. If you’re a club or cafe with a reliable, high-speed wifi network, your customers will notice and start to rely on it. TWT upgraded the wifi throughout the Bow Valley Club and their members were immediately impressed and happy with the service. IT investments can increase business and client satisfaction.

5. Shop around for some quotes and finalize your budget

You don’t have to go with the same providers you went with last year. Don’t be afraid to shop around and negotiate, or ask your provider to bundle services at a discounted price. Play with your budget until you find that perfect price point.

6. Ask for help with your IT budget

TWT is happy to help you analyze your IT spending and ensure you’re using resources effectively. We can provide recommendations on how to reduce costs and improve efficiency through a managed IT services model.

Our intention is to be proactive — always. We always inform our clients of planned expenses six to 12 months before they occur.

Want to chat more about your IT budget? Feel free to give us a call.

Topics: To consider