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Posted by Marketing | November 6, 2018

How to set the right IT budget for your Austin business

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Anytime you set out to create an annual budget for your business, you’re heading into murky waters. After all, a lot can change in 12 months. But IT spending is a particularly thorny topic: Business technology needs change rapidly, so budgets may vary a great deal from year to year. Add to that the fact that many executive teams have been slashing IT budgets of late, and you’ve got a pretty steep uphill battle in front of you.

However, if you do the work to audit your processes and forecast what you’ll spend on tech for the year, you’ll be doing a lot better than most businesses. Reviewing your IT assets will help you defend their necessity and allow you to trim the fat from your budget. Here’s how you can set a realistic budget for your company’s information technology—and keep yourself out of the red.

Inventory IT assets and processes

You can’t set a budget if you don’t know what you’re looking at first. Your annual budget is more than just burdensome administrative work; it’s a chance to set your business’ IT priorities and strategies for the year.

That’s why budgeting starts with a thorough audit of your IT assets. More specifically, you’ll want to review the following.

  • Hardware: This includes your desktops, laptops, mobile devices and telephones, as well as your connectivity hardware such as servers, routers and switches, and cables. Add to this any printers, firewalls, and security cameras or systems you use.
  • Software: Outlay installed desktop programs like Adobe Acrobat, online applications like Office 365 and client/server software like QuickBooks that your business spends money on.
  • Custom software: Note anything that has been specifically developed for your business, as well as any “pay-to-play” application APIs you use.

Your Austin IT services provider will be able to provide reporting that details your hardware roster and many of the advanced software applications you use. Keep in mind, however, that there may be smaller, “one-off” online applications that your team used once and forgot about. Make sure these don’t get lost in the shuffle.

If you need additional help reviewing your IT services, Austin-based IT provider and MyITpros friend Spiceworks has provided a free tool: IT Asset Management Software.

At this point, you’ll also want to list your IT processes so you can audit your IT labor costs. To do this, you need to create workflows for each, including:

  • Sales
  • New client onboarding
  • Customer care
  • Work orders
  • Project/case management
  • Documentation
  • New hires
  • Issue resolution
  • Disaster recovery

Review yearly IT spending

A great measure of your Austin IT services provider is whether it provides regular reporting on IT spending. At MyITpros, for instance, we offer clients a rolling 12-month review on a semi-annual basis.

You can think of this report as a “parts and labor” summary of your expenses with us. Hardware, software and services are broken out into separate line items, with monthly totals for each.

To this, you can add ancillary items such as expenses from other vendors or hardware and software applications that are not directly managed by your IT team.

Budget Ebook banner

Create and assess your baseline budget

Once you have a full picture of past IT spending, you can start creating next year’s budget—and choosing line items that should be eliminated, reduced or reallocated.

To begin, copy last year’s budget into a new document and change the dates to be forward-looking. Think about the services and applications that cause you pain: Are they worth the money? Could you be better served with a different IT partner, external vendor, internal employee, phone system or server setup? Do you need to add bandwidth or bolster cybersecurity? Are there better tools and applications available that could help employees do their job more efficiently? Employees should be able to provide plenty of input here.

Next, locate items you can reduce or eliminate. Perhaps there are aging application licenses you no longer use or on-premise servers you no longer need.

Leave no stone unturned; even the smallest line items can add up over time.

Finalize your budget and plan for the future

After a long haul, it’s finally time to start writing your budget in stone. If you’re planning on implementing new services or changing vendors, you’ll want to get quotes so you can apply those costs to your budget for IT services. Austin vendors like MyITpros will be happy to provide you with numbers in advance. However, where you have to estimate, make sure to add some padding, as you don’t want to overrun your budget forecast.

While you’re finalizing your budget, you may want to plan how you’ll defend each item. Keep in mind that some executive teams want proof that money isn’t going to waste, especially if you’re increasing spending. Rehearse how you’ll explain the value to someone who may not have much tech experience.

This is also a great time to start looking even further into the future by creating or revising your IT roadmap. This document projects the plans and strategies you hope to adopt two to five—or even 10—years out. Evaluating these items and creating a plan now will help you understand where each project fits within future annual budgets.

While budgeting may seem tedious initially, it’s a chance to begin strategizing IT initiatives and deciding how you’ll prioritize projects in the coming months. The process above will give you a framework for creating your budget, but you may need more information before you feel confident signing off on your proposal.

For a more in-depth look into the process, download our ebook, All the Basics You Need to Know About IT Budgeting. This free resource shines a light on IT spending and best practices, giving you the background information you need to create IT budgets that work. When it comes to budgeting, you don’t have to stay in the dark.

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