It is also a good time to work out whether you need to reduce your IT spending, increase your savings, cut your debt, or adjust your finances in some other fashion.
And when considering IT spending and budget considerations, there are a number of proven ways to efficiently prepare your budget for the coming financial year.
- Budget to meet your IT strategic goals
IT systems can ‘make or break’ an organisation’s efforts to meet its strategic goals. For example, a fast, reliable Web-based ordering system can help a business achieve its strategic goals much more effectively than a slow, unpredictable one.
- Compare past budgets
Sure, it can be tempting to base your 2018 budget largely on upcoming expenditure for necessary equipment and services. However, by looking at and comparing past budgets, you can also get a valuable insight into how your IT spending has changed over the past few years – making it much easier to estimate how your spending will go in the future.
- Allow time to complete the process
It is not necessary for an organisation to complete its entire budgeting process in one day. Indeed, the best budgets incorporate feedback from many areas; including management, IT personnel, and even outside consulting firms. Assembling and analysing all this data can take time – so it is wise not to rush the process.
- Leave room for unanticipated spending
Your IT budget should always allow for unexpected expenditures during the coming financial year. Things change very quickly in the digital world, so any attempt to predict your IT budget to the last dollar can be counterproductive. A good tip is to look at your previous spending arrangements, and then set aside a certain amount of budgeted funds for unanticipated spending during the year.
- Provide funds for product updates and upgrades
Traditionally, computer updates and upgrades have always been a significant factor in your IT costs. However, with many firms migrating their IT operations to the Cloud, it is now less of an issue. This is because most Cloud services feature predictable monthly or yearly payments, which often include automatic updates to the services included in the Cloud bundle.
- Consider Cloud costs as a depreciating asset
As the popularity of Cloud-based applications grows, many companies are listing Cloud costs as operational expenses, in order to increase or decrease costs. However, if you are planning on using a Cloud-based application for many years, it may be more beneficial to claim it as a long-term, depreciating asset.
- Factor in IT security measures
With the threat of cybercrime and cyber attacks increasing every year, it may be worth investing in new security measures to help protect your systems. These could range from anti-virus solutions and firewalls, to the use of a managed software services firm to help increase your company’s IT security.
- See IT expenses as both an investment and a cost
Your budget should reflect the long-term effects of IT expenses on your company’s operations by incorporating return on investment (ROI) estimates related to such spending. This is because IT spending should be more appropriately regarded as an investment than a cost.
- Check with your employees
Operating at ‘grass roots’ level, your staff can provide a valuable insight into your IT spending priorities. Therefore, before finalising your IT budget, be sure to check with staff members as to where they feel the organisation’s IT budget dollars are best spent.
Finally, at Core IT we believe any company can benefit from using some or all of the above tips. By doing so, you should also experience less ‘surprises’ in your budget preparation – and get the best out of your IT budget allocation for the coming financial year.
For more information on IT budget preparations, please contact Adam or Kerrie at Core IT on (08) 9200 6030.
With Mike Peeters Media