As the new year has swiftly made its way to us, we're all in the process of planning our resolutions, whether that be to eat healthier, start going to the gym or even be more conscious of how we spend our money. Creating a budget is easy but sticking to it is the hardest part.
An IT budget, similarly to a personal budget, has many benefits and can help businesses pre-plan for expenditures and therefore reduce the likelihood of surprise or unplanned costs. There are many benefits of creating an IT budget, but first, let's define what an IT budget is.
What is an IT budget?
Like any budget, an IT budget is a financial plan set in place over a certain period; most businesses perform this annually; however, some may do it if and when an issue arises.
An IT budget focuses on ongoing expenses, hardware, software, project expenses, business objectives, and much more.
What are the core elements of an IT budget?
Hardware should include all equipment and any additional equipment the business plans on purchasing. Any cost of routine installations or implementation of large or significant hardware should also be included in this section. Hardware that should be included but not limited to:
- Desk phones
Similarly to hardware, this section should include all current software, any future software that the business is planning on purchasing, and the cost of any software installation. Larger software implementation projects such as digital transformation projects should also be included in this section of the budget. Software that should be included in this section:
- Desktop software
- Laptop software
- Tablet software
- Server software
- Backup software
- Licence renewals
- Future/New purchases, new licences
- Routine software installation
This section covers all the support and maintenance of the businesses IT infrastructure. These ongoing expenses include everything that ensures your IT environment is maintained. This includes:
- Data network – WAN connections, VPN, ISP links
- Upgrades to equipment
- Preventative maintenance
- Any other outsource services and suppliers, including managed services such as helpdesks
All Cloud services should be included in this section, including all private Cloud, public Cloud, and hybrid Cloud models.
Future projects (those happening within the budget period) should be detailed in this section. As well as expenses relating to specific projects it should include any new hardware or software required. Items that should be included amongst IT projects:
- Project planning
- Project implementation
- Project schedule
- New hardware or software required to complete the project
Disaster Recovery/ Back up/ Business Continuity
All costs associated with the business continuity plan, disaster and recovery plan should be included in this section. Any ongoing, one-off, or outsourced costs should be outlined. This includes:
- Backup including outsource backup
- Licences and renewals
IT department staffing
This section should include all internal and external IT department staffing. This should include:
- Recruitment cost
- External consultancy fees
- Training and education
How to create an IT budget?
We've created a super helpful checklist of our top 5 steps to complete to develop a killer IT budget.
- Audit your current IT budget
- Compare your IT spend to your competition
- Take inventory of your existing IT equipment
- Communicate with other teams/departments
- Explore future needs
Check out the full blog here.
What are the benefits of an IT budget?
Budgeting for anything is highly beneficial, as it helps you clearly see upcoming costs, which allows you to best plan for hidden or unexpected expenditures. There are numerous benefits for creating and sticking to an IT budget. Here are some of our top ones…
- It helps you be in control of and manage your money
- Assists in reaching your IT and business goals
- Allows for monitoring, tracking, and analysing expenditures
- Proactively planning spend which in turn can save money
- Can adjust budgets depending on business profitability
- Provides for planning for the future
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