As businesses become increasingly reliant on technology, it’s getting more difficult to keep up with constant development in the sector. Information technology budget planning is something you need to start thinking about early on, while also accounting for the many unknowns. Every IT budget needs a degree of flexibility, but by carefully considering your needs and aligning IT to your operational goals, you can reduce costs and increase long-term efficiency.
The Importance of IT Budgeting and Planning
Virtually every business needs information technology. Given recent developments, traditional businesses are also being forced to expand into the online space to keep themselves going, as well as capitalize on new opportunities. Remote work is here to stay as well, so even if IT might not be central to your operations, it’s likely to become so in the near future.
That being said, an IT budget shouldn’t be a wish list of funding for every possible technology project you might want to deploy. It’s important to establish a strategy that enables continuous innovation and prioritizes the things that matter most to your business. For example, if the bulk of your revenue comes from online sales, then that’s where your main investments should be.
It’s never too early to start rethinking your IT budget planning. Every company must think carefully about what to invest in. If funds are likely to be limited, then it’s also essential to prioritize as such that you can innovate without adding unnecessary risk. It’s not about securing as much cash as possible, but about achieving alignment with your broader IT strategy.
Here’s how information technology budget planning can help make that possible:
#1. Prepare for New and Unknown Security Threats
Every new innovation carries a degree of risk, which sometimes outweighs its benefits. Given the constant rise and increasing complexity of cyberattacks, security should be central to your IT strategy and, therefore, to your IT budget. Companies typically spend around 10% of their IT budgets on security, but it’s best to think of it as an investment rather than a cost center. A strong security strategy, backed up by an ample budget, will help you innovate faster, protect your brand image, and stay on the right side of the law.
#2. Ensure Compliance with Policies and Regulations
In today’s data-driven economy, privacy and security are the concerns of the century. People want to know their data is safe in your hands, and regulatory bodies are constantly stepping up their compliance demands. Comprehensive IT budget planning ensures you allocate plenty of funds for achieving compliance, both with your internal company policies and government-mandated regulations.
#3. Control and Consolidate your IT Investments
As technology becomes increasingly complex, so does budgeting. Many companies now have hundreds of apps stored across a mix of private and public cloud platforms and local networks. To reduce risk, maximize efficiency, and keep costs under control, you need to work towards simplifying your technology infrastructure. Budgeting should align with your broader strategy by cutting out things that aren’t necessary and bringing your systems together so they can be managed as one.
#4. Increase Operational Efficiency for Remote Workforces
Although many people will no doubt return to the office next year, remote work is here to stay, and many businesses have started embracing it for the reduced costs and increased efficiency it brings. Remote work will continue to become more important, especially as more businesses entirely do away with their conventional offices and go fully remote. Fortunately, doing so can also free up a huge amount of funds, some of which you can allocate to IT budget planning instead.
#5. Establish a Competitive Advantage for Future Contracts
As an integral component of any innovation strategy, IT budget planning is rather like a race. It’s no doubt one that your competitors are joining in as well, and it’s easy to end up getting left behind. Planning your IT budget well in advance ensures you’re ready to innovate as and when needed. For example, if you encounter an unexpected period of increased demand next year, having a flexible budget plan can give your team ample funds to boost capacity so they don’t end up missing out on lucrative new opportunities. In other words, IT budget planning is just as much an investment in future growth as it is a cost center.
Charles IT provides world-class managed IT services to help you keep one step ahead of the threats, without breaking the bank. Schedule a call with us today to find out more!
Editors Note: This blog was originally published on November 18th, 2020 and was updated on December 19th, 2022 for accuracy.