Information Technology Budget Examples: Common Mistakes to Avoid
The COVID-19 pandemic and global economic recession have disrupted the IT budget cycle of businesses in Connecticut and the rest of the world. But with lockdown restrictions gradually being lifted, organizations are steadily rebuilding, re-budgeting, and planning to return to a scalable state.
Some companies will be able to return to their normal level of revenue, allowing them to ease cash flow restrictions and allot a higher budget to IT. However, without sufficient information about the latest technology trends, business owners may encounter problems when planning for an IT budget. A chief information officer (CIO) or managed IT services provider (MSP) can help come up with an effective IT budget plan and avoid mistakes that can lead to overspending.
Before drafting an IT budget plan, you need to look at some examples of information technology budget templates and use or adapt one that makes the most sense for your business. To ensure that your IT budget plan is on the right track, take note of the most common mistakes you should avoid:
- Not setting aside money for upgrades or replacements
If your business operations rely on technology, you need to keep up with the latest technological advancements. Unfortunately, many business owners tend to delay upgrades or replacements to save money. Using outdated software and hardware can be more costly than upgrading or replacing them because:
- Outdated technology can decrease productivity.
- Your company won't be able to keep up with competitors.
- Outdated solutions may not fit your current and future goals.
- Not investing in proper training
It's not enough to invest in the latest technology for your business; you also have to ensure your employees have the skills and knowledge to use that new technology. Without adequate training, you risk reducing the efficiency of your employees, which can lead to productivity loss and low employee morale.
- Not planning for underlying cloud expenses
More businesses are moving their storage systems and services to the cloud to cut down on procurement and maintenance costs. However, migrating to the cloud does not come without additional expenses. For instance, you need to pay for additional bandwidth to migrate and access information if your organization handles large data sets such as customer records and media files.
In some cases, moving to the cloud can even reduce employee productivity. Remote employees working with an unstable internet connection can experience slow and unresponsive cloud applications. If that's the case, then you have to consider upgrading to 5G devices if a network is available in their area. Switching to 5G means that data usage will also increase, which means you have to spend more just to keep your remote staff connected to the cloud.
- Not paying attention to your disaster recovery (DR) plan
Natural disasters, system failures, and cyberattacks can cripple your organization if you don't have a disaster recovery plan in place. This is why you shouldn't leave DR out of your IT budget. Modern backup options such as cloud storage, remote servers, and portable storage devices can ensure that your business can quickly recover from a disaster, and you must factor them into your plan.
- Not thinking about last year's budget
Many business owners make the mistake of assuming that their IT needs will remain the same year after year. This causes them to roll over their IT budget from one year to the next. The truth is, IT needs rarely stay the same every year, which is why you need to create a system that follows a cycle of investment and depreciation.
For example, during an investment year, your IT budget should go to upgrading and replacing outdated software and hardware. On a depreciation year, your budget must focus more on the core maintenance of your infrastructure. There's also no need to rotate every year. There will be instances where an investment period could last for two or more years, depending on your infrastructure and the nature of your business. By properly planning this cycle into your IT budget, you won't be caught off guard by sudden expenses.
For many businesses reopening and rebuilding in Connecticut, planning an IT budget can be challenging, which is why they should partner with a trusted MSP like Charles IT. Our tech-savvy experts will assess your infrastructure and plan a yearly budget tailored to the needs of your business. Call us today to learn more!