Planning For The Future: 7 Steps To Create An Effective IT Budget

How do I resolve painfully slow internet connectivity or network performance issues? How do I migrate to the cloud? How can I recover lost data? How do I safeguard my IT infrastructure from cyber attacks?

These are just a few of the many IT challenges organizations are facing today. Proper IT budgeting takes these and other immediate and long-term issues into consideration.

Whether you need to resolve routine IT equipment and software problems or you’re planning a major company expansion—your comprehensive IT budget should identify and prioritize your IT concerns to ensure they align with your strategic business goals and objectives.

After reading this article, you will learn why developing a comprehensive IT budget as part of your strategic business plan to help ensure that your IT infrastructure runs securely, efficiently, and effectively to give you a competitive advantage.

What Should My IT Budget Include?

Small and medium-sized businesses generally earmark about 4 to 8 percent of their organization’s gross profits to IT-related expenses. The amount devoted to your IT depends on the size of your business, as well as your short- and long-term goals.

The importance of strategically budgeting for IT technologies and resources cannot be overstated. By establishing a well-planned IT budget, you can accurately prioritize your IT needs and allocate the appropriate resources to establish a competitive business advantage and move your business forward.

Related Article: Align Your IT Budget & Business Strategy To Yield Success

7 Steps To Take When Setting Your IT Budget:

When figuring out your IT spend, you should begin by creating a team within your organization of executives, managers, and IT professionals that will be responsible for evaluating your IT problems and needs and developing a plan to address those issues within the scope of your overall business goals.

If you do not have the internal staff to provide guidance, you may benefit from the expertise of a managed IT services provider (MSP) to provide strategic insight and recommendations to optimize your IT budget spend and maximize your network efficiency and IT security.

Assessing your IT landscape to determine how effectively your devices and software tools are working and communicating with each other.

For instance, if you’re having repeated problems with network connectivity, device malfunctions, or data loss, it may be time to overhaul your hardware and upgrade your software to improve productivity and limit downtime.

Having thorough knowledge of your physical, digital, and human resources and assets is a critical part of being able to properly budget for your IT needs.

Your current IT expenses should include your routine operating expenses, including:

• Labor costs for existing staff
• Ongoing services and support
• Annual software licenses and renewals
• Managed IT support (if you’re using an MSP)
• Small-scale equipment purchases

Is your hardware nearing its end of life? Do you plan to onboard a significant number of new customers in the near future? Will you need to ramp up your staff to meet increased demand?

Are you planning to open new offices, warehouses, or other physical buildings that will need to be integrated into your IT network? Do you plan to undertake a large-scale project like moving your servers to the cloud?

By doing a comprehensive cost analysis of your current and forecasted capital expenditures (CapEx) vs operating expenses (OpEx), you can set a realistic budget that will ensure your business continues to run smoothly and is well-positioned to take advantage of future opportunities.

Outside of these basic IT costs, your budget should also accommodate more complex needs that might require expert support to implement and/or manage.

For instance, you may need to acquire additional security tools and systems to increase your network defenses against cyber incidents to meet certain regulatory requirements.

A growing number of insurance companies are also requiring companies to obtain cybersecurity insurance. Failing to have cybersecurity insurance could potentially lead to your business facing severe fines or possibly even losing coverage.

Related Article: Does My Organization Need Cyber Liability Insurance? (8 Myths Uncovered)

6. Prepare for a disaster

Disasters can come in many forms: a devastating hurricane, human error causes your data center to crash and you lose critical data, your equipment or software fails, or you suffer a data breach compromising sensitive business or customer information.

These are just some of the many ways your organization can be hurt in a disaster. Implementing a disaster response and recovery plan should be a core part of your IT budget planning.

Establishing automated data backup measures are key to limiting the effects of a potential disaster to minimize downtime and allow your business to get back up and running quickly.

Related Article: Data Backups Are Key To Disaster Recovery

Your budget should include data backup plans to cover all the necessary hardware, software, licenses, storage, and other resources you will need in the event of a disaster.

7. Improve cybersecurity and vulnerability protections

Another essential part of your IT budget strategy should include network cybersecurity measures to safeguard your business data, systems, devices, and network.

You should identify any vulnerabilities and determine the best IT tools to shore up those security gaps to mitigate security risks and prevent bad actors from weaseling into your systems.

Automated patching, robust firewalls, multi-factor authentication, antivirus and anti-malware software, endpoint protection, and employee security awareness training are some of the critical solutions that can help protect your IT landscape.

What’s The Bottom Line With IT Budgeting?

After reading this article, you now have a more thorough understanding of the importance of establishing a comprehensive IT plan that addresses both current and future IT needs while staying in line with your overall business goals.

An advantage of hiring a managed IT services provider is that they offer strategic IT planning and budgeting, along with providing advanced technologies and expert staff that can solve your IT problems and streamline your IT management—all at a predictable, monthly cost.

Although Kelser offers comprehensive managed IT services and advanced solutions, we recognize that managed IT support is not the answer for every business. 

If you already have enough qualified staff to manage the steps outlined in this article or have a small staff of fewer than 10 people, then you may not need the help of an external managed IT services company.

If not, you might benefit from the expert guidance of an MSP to help you prioritize your IT budgeting needs. An MSP’s team of knowledgeable IT and cybersecurity professionals can identify and implement the right IT solutions that support your future business plans.

By providing proactive IT support, an MSP can help you gain a competitive edge instead of simply trying to “keep the lights on” in addressing your IT issues.

Read this article if you’d like more information about what MSPs do and the comprehensive services they provide.

If you’re curious to see how cost-effective managed IT services can be for your business, click the button to get a free, immediate estimate. We promise you'll get a no-obligation cost estimate, with no sales pressure, to see exactly what you'd get for your money.