Four keys to properly budgeting for technology

September 27, 2018 - The Daily Memphian by Patrick Tamburrino

If you look at some of the biggest and most successful companies of our time (think Amazon, Google and Apple), one thing they all have in common is their commitment to properly budgeting for technology. IT departments handle an increasing amount of responsibility as we rely on technology to carry out many day-to-day business functions. In order to remain on the competitive edge of your industry, it’s important to allocate proper dollars, staff and resources to ensure your organization continues running smoothly and efficiently. Here are several tips for creating and maintaining an IT budget:

Look at the Competition

What are your competitors spending on technology? What are companies of similar size in a similar industry spending on technology? Understanding how similar organizations run and budget for their IT departments can help you set realistic budgets as well as expectations for keeping things running smoothly and efficiently. There’s no need to reinvent the wheel—take note of what others are doing that seem to be working successfully and mimic some of their initiatives and budgeting guidelines in your own company.

Take Inventory

It’s important to understand what your company has in terms of technology and resources and what it needs in order to stay relevant and competitive. Is your software up to date? Are you in need of one-time purchases? Perhaps you need to hire additional IT staff to support your efforts. From resources to equipment, software and hardware, you have to know where you are and where you need to be in terms of your IT strategy. Understanding your inventory will help you develop a budget that will meet your IT goals and objectives.

Create a List and Prioritize

Successful IT budgets account for business needs, IT support, routine maintenance, system replacement costs, hardware and software licenses as well as unexpected system failures and outages. It may seem overwhelming, but when creating a budget, prioritize your IT needs and ensure you budget accordingly to keep your employees productive and your customers happy. For instance, e-mail servers and data security may be the top concerns to address while customer portals or other initiatives may be lower down the list.

Budget for Flexibility

Many companies budget at 100%, which doesn’t allow for any flexibility in growth, changes or other unforeseen circumstances. Budgeting at 75-80% allows your organization to be nimble and prepared for anything to change. Since technology is one of the most rapidly changing industries, it’s important to realize that hardware/software and other IT processes may change at any given moment.

While it may be tempting to cut back on your technology budget, consider the value it brings to your company and your employees. Could you use expert advice for creating and implementing an IT budget? Check us out at tamburrino.com.