How to Set an Annual IT Budget

Regardless of the type of business you’re running or even the industry that you’re operating in, accurate IT budgeting is a mission-critical process. It makes sure you’re allocating the appropriate funds you need to keep your IT infrastructure up and running.

But it involves more than just making sure that someone remembered to pay the internet bill on time. Your IT budget provides the essential finances necessary to guarantee that your IT resources are properly aligned with your long-term business objectives, increasing return on investment, maximising efficiency, and lowering costs in one fell swoop.

This is part of why it’s so important to update your IT budget every year. Tech is the key to your organisation’s competitive advantage, but it also evolves at a rapid pace. If you don’t make a proactive effort to keep up, you’ll undoubtedly find yourself left behind.

So in terms of creating that all-important annual IT budget, there are a few key things you’ll want to keep in mind. 

Start with Your Fixed IT Costs

One of the most important steps to take in terms of creating the perfect annual IT budget is also one of the first: taking a look at your fixed IT costs. Sit down and figure out how much money your existing IT hardware (meaning desktop computers, laptops, mobile devices, servers, etc.) actually costs to maintain. Take a deep look at your entire organisation to determine the amount of money that it takes to “preserve the status quo”, technologically speaking.

The number that you arrive at will essentially act as your baseline figure as this figure rarely changes in any appreciable way, thanks to things like active service agreements, one-off purchases, and other elements.

Think about Future Needs

One of the many reasons why your IT infrastructure is so important is because it enables your employees to work smarter, not harder — meaning, it increases the quality of the work they’re able to do while lowering the costs at the same time. Creating a budget around current issues that need to be addressed (upgrades, repairs, other maintenance issues, etc.) is important, but you also have to think about the future too.

Start with your actual long-term objectives that you want to be able to accomplish in the next year; then think about how IT can and should enable and empower that transformation. Have you been thinking about giving your employees the ability to work remotely, for example? It’s not as easy as flipping a light switch. You’ll need to think about new equipment purchases, testing, installation, ongoing maintenance, and more.

Think about all the strategic moves you want to be able to make in the next year, then determine what technological shifts will need to happen in order to get you there. Add these numbers to that "baseline" figure that you started with.

Think about New Hires in Terms of IT Costs

If your workforce is currently expanding (or you’re thinking about bringing on new people in the future), one of the factors you have to consider involves how this will affect your IT budget. 

Think about it like this: every new hire that you bring into the fold will need a desktop or a laptop computer. That means a new hardware purchase, which itself gives way to software purchases and other licensing considerations. They’ll also need to be trained in how to use those resources. And the list goes on.

Given your current IT infrastructure, consider the cost of adding a single new employee in these terms. Then, factor in the incremental cost of adding at least one more employee into your annual IT budget. If you know for a fact that you want to bring in ten new people by the end of the next calendar year, adjust those projections accordingly. 

Consider Teaming with a Managed IT Service Provider

Annual IT budgeting is time consuming, intensive, and can be difficult to say the least. But IT investment is one of those things that you really can’t afford to get wrong.

Therefore, it’s important for you to understand that there are options available to you to help streamline this process as much as possible and that it’s essential to bring in the help of experienced professionals if you feel like this is something you just can’t do on your own any longer.

Powernet is a company that specialises in everything from IT solution consultancy to managed IT services. We deeply understand that technology isn’t just a platform — it’s a tool, the same as any other. How you use that tool will be the deciding factor in whether or not you’re able to achieve the business outcomes you need moving forward. Because of this, we work with businesses of all sizes on a regular basis to help make sure that their technology spend is properly aligned with both their short-term goals and long-term objectives, no exceptions.

We take the time to get to know your business intimately, putting us in the best possible position to make sure that your IT budgeting is as accurate as possible and that your infrastructure acts as the solid foundation you need moving forward.

If you’re interested in eliminating the burden of creating an annual IT budget in the first place, we also offer outsourcing IT services that cover everything from procurement of equipment to IT support, to project delivery, to IT data protection, to migrating to the cloud, and so much more — all in exchange for one low, fixed, and (most importantly) predictable monthly fee. 

Creating the ideal annual IT budget to meet the needs of your organisation can be a challenge, yes — but it is not something you have to do alone. Whether you’re interested in bringing on the trusted hand of experienced professionals or you’re interested in outsourcing your IT requirements entirely, please don’t delay. Contact Powernet today for more information.