Every business spends money on technology. Smart businesses have an IT budget that they review at least annually. If you either don’t have a detailed IT budget or don’t have a specific line item in your budget for IT spending, you should. Although having a line item in your overall budget for IT is a good start, it’s even better when you have a detailed budget.
Why an IT Specific Budget is Important for Businesses
Technology is an ever-increasing expense for businesses. Today’s businesses spend, on average, somewhere around 5% of their annual revenue on technology. That may not seem like a lot in comparison to other expenses, however, if you don’t plan your IT budget, you may end up spending significantly more without even realizing it.
Review Software/SaaS Expenses
Because most of today’s software has a monthly or annual subscription fee, you need to review not only next year’s cost, but also if you’re currently utilizing the best plan for your needs. As you grow, you may find that you’re currently paying for a package you’ve outgrown plus individual seats when there are larger packages that cost less in total and provide the user licenses needed.
Evaluate Hardware for Its End of Life
When you plan to purchase new hardware, you can better budget for it. Laptops, desktops, routers, servers, and other hardware have an expected useful life. Do you know where each piece of hardware is in its lifecycle? Replacing hardware before it actually breaks down helps avoid work interruptions. If you don’t know what the expected lifecycle of your technology is, talk to your IT team or hire a managed service provider to audit your hardware so you can plan your upcoming IT budget for hardware needs.
Know Future Cost for Cloud/Data Backup, Cyber Security Services & Cyber Insurance
Even if you have an IT team in house, they won’t be providing these services. Talk to your managed service provider or cyber security team about your current plan. Are the services you’re paying for covering your needs based on your industry? Can you get a discount on cyber insurance premiums if you had another service? What are your expected premiums for cyber insurance in the coming year?
Internet & Telecom
Since most businesses today utilize VoIP for their telecom needs, you can line item these expenses together for your IT budget. In most cases businesses sign a contract for a number of years at a fixed cost for their dedicated internet access. Where are you in your contract? If you are at or nearing the end, you may want to find out what the cost will be in the future. Some businesses rent or lease their VoIP equipment. Where are you in that cycle? Do you need to budget for new telecom hardware?
Tech Team/Managed Service Provider/IT Services Company
Every business manages their IT differently. If you have a tech team or person on staff, have you included their salary in your budget? If you utilize an IT services company or managed service provider, have you requested a meeting to review your current services and future needs? Now is the time to make that call and they should not charge you for the meeting.
Does Your Business Need Help with Your IT Budget?
As a managed service provider, we offer free reviews of budgets to our clients on retainer. If you’re looking to hire a managed service provider to help manage your IT budget or have grown to the point where you need to create a line item budget, call Toucan Technology Group. During our initial consultation, we can share our services and provide you with a proposal so you can budget for our services. And, at Toucan Technology Group, we offer our No Extra Fee Guarantee. Call us today to learn more about our services and how we can help you with your IT budget – (317) 356-4666 or fill out our contact form.
