4 Key Components of a Successful IT Budget
Are you troubled by what you’re spending (or not spending) on IT? You know how to analyze the costs for raw materials, equipment, sales commissions, and media spend, because you grew your career immersed in those details. However, the “how much” and “for what” questions you have about your IT spending remains a mystery.
As technology continues to make a greater impact on every aspect of business, more organization leaders are taking a proactive role in assessing IT budget. In the past, the temptation was simply to make minor tweaks every year and, when budgets were tight, defer innovative initiatives. But as technology has progressed at a rapid pace, business leaders recognize the importance of leveraging new technology as it becomes available or risk falling behind the competition.
Better IT Budget Starts with Business/IT Alignment
When it comes IT budgets, the biggest struggle organizations face is the disconnect between the business and IT department. The IT department isn’t always privy to the long-term goals of the business, and the business leaders don’t fully understand how and when to bring IT to the table for those important discussions. Now that the role of IT has expanded beyond just “keeping the lights on,” it’s imperative that the IT budget matches the organization’s strategic priorities as a whole in order to achieve higher returns on IT investment.
Allocating budget is the first step in providing significant new functionality that drives businesses forward. Businesses who do not properly plan their IT budgets ahead of time will likely experience failed technology implementations or end up overspending on the wrong solutions for their organization. Here are the four main components to consider when planning your IT budget:
- Focus on Innovation vs. Maintenance
- Categorize by Function
- Track IT Time
- Allocate IT Costs
To help CIOs endure the budgeting process and generate productive conversations with their IT teams, SWC developed a guide that elaborates on these four components and provides tips to ensure mid-market business leaders have an effective IT strategy to advance their business.
SWC Managed IT Services
When evaluating IT costs, it’s important that innovation projects align with business priorities. Many organizations look to a managed service provider to help bridge the gap between business and IT in executing a strategic roadmap. Managed Service Providers can also offer a deeper understanding of the ongoing maintenance costs associated with various projects to avoid unexpected surprises. Many companies opt to staff for maintenance initiatives and outsource during bursts of innovation.