Technology has certainly infiltrated almost every aspect of a human’s day to day interactions. From the boardroom to the lounge room and everywhere in between, we are engaging and spending more time and money on gadgets, apps and software than ever before.
And while it might be rather simple to manage our own personal tech expenses, it certainly becomes more complicated when it comes to setting the company’s IT investment, or better yet, finding IT cost savings for the business.
However, investing in a robust IT budget can actually save an organisation money, without sacrificing technology efficiencies.
Why business owners should invest in IT
A solid IT investment budget can lead to the integration of better, more cutting-edge technologies which in turn can help streamline processes and improve the bottom line.
Some ideas include:
- Centralising operations across the network to cloud-based solutions. This can also increase flexibility in staff and work hours and can therefore allow an organisation to be more responsive and agile in the marketplace.
- Smart technologies can also help reduce a company’s carbon footprint; simple things like a reduction in printing, or implementation of more energy efficient equipment with upgraded software to reduce electricity costs.
- More sophisticated IT solutions can streamline operations and save big dollars in the process. For example, a document management solution can optimise an organisation’s entire document output process from workflows to security, printing and environmental impact and can reduce output costs by up to 30 percent.
Beefing up your IT budget means you can take advantage of new technologies which, for a lot of businesses can wedge the divide between competitors.
But when it comes to setting your IT budget, how do you know what to include and what to actually allow for?
How to set your IT investment budget
IT budgets are swelling year on year as more companies integrate a digital transformation strategy to stay in the game.
Before you get started, be really clear on the objective and what you want to achieve for that financial year with the implementation of the budget.
Make sure you have at least four or five clear goals in place. For example:
- Increase sales by 10%
- Reduce administrative costs by 30%
- Increase overall output by 35%
Then, ask yourself these questions:
- Compared to other departments, how much does your company’s top tier value the IT budget? If this is considered low, you might need to implement a strategic communication plan to better educate those at the top.
- How does this year’s budget compare to last year’s and what were the real cost savings and findings from the implementation of the previous budget? This will give insight as to whether the budget was enough to actually impact the business, or just keep it idle. Take a good look at what worked, and what didn’t.
- Does the breakdown of spending serve all divisions of the business and which projects are more timely than others? Depending on the nature of your business, particular aspects, such as sustainability or security, might take priority over others. Recent research showed that more than 50 percent of respondents were making security a priority in their IT budget spending for 2018.
- What percentage of the overall budget is allocated for IT and does this align with the forward projections for the company?
- Which IT projects will leverage and increase revenue the quickest and how is this prioritised within the budget rollout?
These questions should give you more clarity on how to shape your budget, but for some, this is the easy part. All good budgets have a swag of ambassadors or nay-sayers who want to pick and pull it apart right down to the very last, err, bite.
Don’t forget to champion your budget to your relevant stakeholders and be mindful of how you should best communicate to them. Remember, you’re basically pitching the budget to them so you want to know the full ins and outs of your spending. This is the finish line where most people tend to choke. So it’s vital you do some research into who it is you need to convince and understand their management style in order to best communicate your vision.
Once you have your budget signed off on, be disciplined to follow it through and evaluate it quarterly to ensure it’s still following the trajectory you anticipated.
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