Business + IT Insights

How To Get The Most Out Of Your IT Budget

Posted by Dave Lazor on Thu, Apr 10, 2014


475545477The most challenging aspect of building an IT budget is transitioning from the annual “make it fit” exercise to a meaningful planning session in the C-suite. This transition is more than just throwing numbers around on a spreadsheet – it requires careful planning for your future success. The future of business in general relies on technology, and your IT budget should reflect that.

One of the main reasons why organizations fail to see value in their IT is because they don’t treat IT spending as an investment towards future success. To counteract this mindset, think about the reasons why you spend your IT budget:

4 Reasons You Spend Your IT Budget

  • To keep your business running
  • To let your business expand (more people, new locations, etc.).
  • To let your business evolve (more of your processes are can become automated, older technology becomes outdated and doesn’t work correctly).
  • To let your business grow (you need better technology solutions to better serve customers and to gain a competitive edge in the industry).

If you think about your IT budget only in terms of short-term demands, it may seem overwhelming. But with proper planning and professional IT cost optimization, your technology starts reaching those long-term goals listed above. To accomplish this, IT planning needs to be in line with your company’s overall strategy and goals.

Dissecting A Standard Budget

There are three distinct components of IT budgets.

Run

The run budget is, quite simply, the budget that keeps your business running. It offers stabilization – nothing more and nothing less. Cutting corners in this section of the budget is a risky move. Because solutions vary in cost, proper, in-depth analysis is key to finding ones that stay within your budget. A run budget includes things like:

  • Replacement items
  • Key software upgrades
  • Storage monitoring
  • Information backup
  • IT support for users

Grow

The grow budget allows you to introduce new capabilities or improve upon existing ones. Budget items in this category should be aligned with a company’s strategic goals to expand and evolve. If your business goal is increased efficiency, you should plan on budgeting for new software that automates internal processes. This increases employee productivity and draws maximum value from your IT budget.

Transform

The transform budget is for developing initiatives to grow your business or investing in technology that gives you an edge. An example would be the creation of a new app for customers to place orders, schedule appointments and access information regarding their account, or allowing them to play a more prominent role in the business-to-consumer relationship. This project would fall under your transform budget.

In an effort to keep IT costs lower, your transform budget might be the first one to get cut. These expensive initiatives require ample amounts of time, energy and skill to successfully execute. But, a fair warning: We’re in the digital age, and these transform initiatives are usually critical to the long-term success of your company.

Your IT budget should function like any other budget in your business. Within other departments, do you track spending and research solutions to keep costs within budget? Or, do you attempt to adjust your budget with innovations and upgrades? Your IT budget should be no different. IT cost optimization isn’t just about saving money – it’s about smarter spending on items that maximize the value IT brings to your business.

To learn more about managing and maximizing your IT budget and using innovative technology solutions customized for your business growth, click the button below.

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Tags: business technology, IT Strategy, IT Budget

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