The Importance of an IT Budget & Why Businesses Need One

Published on 28 June 2022

An IT budget is similar to your overall company’s budget; it is there to assess expenditure and ensure you are utilising your IT and outgoing costs associated effectively. This is normally done in line with your company’s financial year but can be done quarterly or based on specific projects.

Initially, this process can seem overwhelming and time-consuming, but it is essential for any business that wants to remain competitive. If you are using a managed IT service, it can ensure your money is being used to keep your IT in line with your overall business objectives.

Why is it important?

When using a managed IT service in conjunction with an IT budget it allows you to allocate spending to different areas of your IT without overspending. It can help you plan for upcoming project work, this could be onboarding a new employee or migrating to a cloud environment.

Particularly when using a managed IT service, it can ensure that you are getting the most out of your IT provider. It can show you what your capital is being spent on and whether this is cost-effective for your business. It can benefit both you and your managed IT service, by showing you, with data, why certain expenditures are necessary as well as allow you to make data-backed decisions that best align with your business needs.

Benefits

An IT budget can provide many benefits for your business. It can help increase productivity by ensuring you are making better data-backed decisions for your business. It gives you competitive, strategic thinking to allow for better choices. For example, comparing the costs of moving to more automation to free up an employee’s time to focus on more important tasks to the current cost of the employee doing that work manually.

Creating a budget for your IT can have a long-term positive impact on your business. As we move more towards a digital world, with cloud services, shared documents and virtual desktops, proper IT planning and budgeting will be essential for you to remain competitive. IT budgeting can help you better control your spending. It can show you where you may be overspending and where you are underspending, allowing you to better utilise your expenditure. This may not be clear when you start but after you have significant data you can use this to make informed decisions and give your choice more justification to your colleagues. In addition, it can help you work better with your Managed IT service provider with upcoming projects, they can work to your budget and do the projects in increments to better suit your IT budget.

 

Key Elements to Include in Your IT Budget

It can seem daunting when you begin planning your IT budget, but if you have a managed IT service provider, they should be able to help you with this. We’ve outlined a few key elements to include in your budgeting. These may vary from business to business, some businesses may have more or fewer elements to their IT budget. The ones we have chosen are the essential ones we believe should be included.

Hardware

Hardware is physical equipment you use to perform your digital tasks. These are things like devices, servers, printers, installation costs, keyboards etc.

Software

Software is anything within your devices that your need to work and keep your data safe. This could be things like cyber security software, applications, licences, backups etc. Remember to factor in additional members of staff and the cost that will incur on the business.

Support

Your IT support provider should be included in your budget. This is to make sure you are getting the most out of your Managed IT Service Provider. It is a good idea to look at their first-time fix rate and ensure they are proactively fixing and updating your devices and software. 

Projects

If you have big plans for the IT digital transformation of your business, you should make sure you are properly budgeting for it. Whilst some projects are in the future, implementing efficient budget planning can allow you to carry out these projects effectively. Think of it like buying a house, you need to budget your existing income to save enough to put down a deposit. It is the same with project planning. 

 

Managed IT services are there to help you capitalise on business opportunities and meet your business objectives. Without a thorough IT budget, it will be difficult to track if your investment in your managed IT service provider is successful or not. An IT budget can help you avoid unwanted costs and better plan for the future of your business. It can give you unique insights into how your business is spending its IT budget and allow you to make more effective decisions for the future of your business.

If you would like help creating an IT budget or to discuss the future of your business’s digital environment, call us now on 01908 044202 or book a meeting below.