As IT spending increases, it is more important than ever to keep tight control over spending through effective IT budget management.
If only it were that easy. Let’s take the example of software licenses…
Your software licenses are probably managed by your IT team, and if you’ve ever looked at them, you’ll realize how complex they are. Complexities creep in over time as new software is bought for specific tasks, projects, and other initiatives. This can lead to overlaps in functionality, software being underutilized, and spending for more or less than you really need to achieve your business goals.
Then there is the approach of software vendors who make licensing complicated and notoriously difficult to track. This leads to many CFOs and IT managers across Oregon experiencing IT licensing nightmares. Getting on top of this issue and other IT budget issues is crucial to ensure you are only paying for what you need. IT budget management is also essential for a range of other reasons, including future planning, performance optimization, operational resilience, and user experience optimization.
To help with IT budget management in your organization, here are five best practices you should follow.
As IT is so crucial to the day-to-day operation of many businesses in Oregon, it is tempting to only look at immediate requirements when making purchasing decisions.
However, the decisions on IT spending that you make today will impact your IT spending in the future. Yep, that means all those IT spending decisions made in the past are now influencing what you spend today.
Of course, it is essential to make decisions that deliver on current business and IT requirements, but it’s also beneficial to keep your long-term IT strategic roadmap in mind to ensure alignment with your goals.
Every business works to achieve its goals and objectives with minimal friction or obstacles along the way.
It is rare for plans to work out this way, as the realities of life and business always make their presence known. Most of the time, it is possible to adjust your approach, particularly if your organization prioritizes agility.
There are some situations that can be described as worst-case scenarios. This can be financial worst-case scenarios, such as losing a large client. Or it could be IT worst-case scenarios, such as a major cyberattack.
In terms of managing your IT budget, it is beneficial to think about potential worst-case scenarios and develop a plan in relation to IT spending. IT spending will only be one part of worst-case scenario planning, of course, but it is an important element, so it shouldn’t be neglected.
One of the issues with IT budget management is not knowing where you are spending money.
Only when you know where the money is being spent can you start analyzing whether you are getting value for money. Understanding where your IT budget is going can also help you plan for the future and identify improvement opportunities.
A good approach for getting a handle on how your organization is spending its IT budget is to break down the budget by category.
As an example, you could have three main categories:
Within hardware, you could then have several sub-categories. Examples include:
In the software category, you could have Software as a Service (SaaS) subscriptions as well as any other software costs.
The IT support category would include:
There are some elements of IT that are absolutely essential, so they should be given top priority in your IT budget.
This includes licenses for the software that is crucial to running your business, things like website maintenance, and data storage. Backup, disaster recovery, and security updates are also crucial, so they should be on the priority list, too.
Never substitute any of these elements to spend part of your IT budget on nice-to-haves. Don’t cut corners on the priority areas either to free up money for spending on other things. Priority IT spending should always come first.
There are many areas within IT where consolidation can not only reduce costs, but also make IT in your business easier to manage.
There are two main areas where consolidation can deliver benefits for your business, as well as benefits in relation to IT budget management:
IT budget management is a process that takes time to gather information and conduct an analysis. It is a process that delivers tangible benefits and helps ensure you maximize business value from your IT spending. Working with an IT managed services provider can take your IT budget management to the next level.
An IT managed services provider will have experience in optimizing IT spending, and they will bring new ideas for performance improvements and reducing costs.
At StepUP IT, we can make sure you are getting the most out of your IT spending as possible. Get in touch with us today to find out more.