Worldwide IT spending was projected at $3.4 trillion for a single year. With COVID-19 still impacting businesses, however, many are looking to cut costs. If you need to adjust your IT budget this year, it’s important to plan ahead.
Not sure where to start? Here are the five tips you need to succeed.
With these tips, you can improve your IT department and still operate on a tight budget. A limited budget doesn’t have to slow you down! Instead, you can use these tips for more effective business planning.
Make the most of your limited budget. Get started with these five easy tips today.
- Schedule It In
It’s not enough to establish your IT budget or have a spending plan. Instead, you need to spend time on business planning regularly. Otherwise, you might not realize there are areas you’re failing to consider.
Take the time to do your homework. You can find helpful tips from companies who have worked within a tight budget before. Their advice could help you avoid making mistakes in the future.
Budgets are a strategic tool. Without planning, you’ll only end up guessing. You could overspend as a result.
Instead, accept that your new budget is a reality. Then, start planning.
Developing a plan will help you avoid the risk of wasting your IT resources and budget. First, consider the organization’s mission. How can your IT plans help you accomplish that mission this year?
Make sure your IT strategy aligns with the company’s strategic goals. You’ll have an easier time prioritizing. Otherwise, you’ll struggle to determine your priorities and capacity.
A limited budget can make it feel like there’s little wiggle room on projects. You might need to terminate projects in the middle of the year. If that’s the case, put more attention on projects that impact the business.
Make time to train your team, too.
Review your budget every month. Where are you over- or underspending? Remaining proactive with your budget will help you find opportunities as you go.
Otherwise, you might not realize you’re overspending until it’s too late.
- Consider the Past and Present
You can learn how to better utilize your limited budget by learning from the past. Look at your IT budget from previous years. Where did you need to spend the most money?
You can then start allocating funds toward those areas, knowing they’re likely to require more time and money.
You don’t have to budget down to the last penny. Instead, try to estimate where money is coming in and going out. There’s a chance your projections are wrong.
You can make adjustments to your projections as you review your budget each month.
As you use these tips, keep auditing and reviewing your budget. Look for ways you can improve your spending for the year. Don’t forget to consider your goals.
How can your IT budget help you accomplish those goals?
Budgeting IT improvements based on your strategic goals will ensure your IT initiatives generate profit. Otherwise, you could waste time and money.
Avoid cutting costs that can impact your company’s performance.
For example, avoid cutting IT training from the budget. IT training can help you avoid problems down the road.
About 1 in 40 small businesses are at risk of becoming victims of cybercrime. In fact, phishing campaigns targeted small businesses 43% of the time in a single year.
Don’t ignore your security initiatives, too. You might need to spend more money on security measures this year. Investing in security measures will help you avoid bigger costs in the future.
Look at your fixed versus variable costs. Upfront spending can get costly throughout the year. It isn’t flexible, either.
Instead, consider as-a-service options. You can keep scalability and flexibility in mind to cut costs.
- Know Your Priorities
If you want to make the most of a limited budget this year, consider your priorities. Chances are, you’ll need to make cuts to remain within your budget. You can work with your business leaders and stakeholders to determine what to cut.
Having a list of your priorities ready is crucial. You can make sure you’re not cutting costs that benefit the business.
For example, cutting security costs from your budget could lead to a ransomware attack or data breach. The average cost of a data breach is about $3.86 million for a single organization.
Prioritizing security can help you protect your business. In fact, a breach could hurt the company’s reputation. Customers might decide not to trust you, leading to fewer sales.
You might need to budget for hardware and software updates, too. Otherwise, outdated systems could impact your productivity.
Employees often use their hardware and software until the systems fail. Failures can lead to other issues, including security risks and downtime. Budgeting for hardware and software can help you remain proactive.
What changes can you make to your workspaces? Make sure you don’t overspend. Choose technology that aligns with your IT budget.
Cloud measures could benefit your business, too. Many businesses are increasing their spending on cloud applications. As more businesses move to a work-from-home model, using the cloud has become essential.
Are you listing cloud costs as operational expenses? Do some calculations first.
Setting cloud costs as operational expenses could help you scale your costs as needed. Then, you could remain flexible and work within your limited budget.
If you plan on using the cloud for years to come, don’t consider it an operational cost. Instead, you might find it’s cheaper long-term to view it as a fixed amortization expense.
Look for ways to consolidate costs, too. A centralized group can handle your help desk, security, and application development as a single service. Consolidation can help you limit spending without cutting back entirely.
- Look for Alternative Funding
If your limited budget is too limited, finding ways to improve your budget with alternative funding. For example, you can turn to your government for a grant. Consider state and federal grants for the help you need.
There are also public partnerships and private sector options available.
Otherwise, you might want to consider contacting and leaning on your industry Information Sharing & Analysis Centers. For example, you can turn to the MS-ISAC or NASCIO. They can help guide you.
Consider other financing options from your vendors. They could help you with a proof of concept project, allowing you to test-drive changes.
Do you need to hire a specialist, such as a data scientist? If it’s not within your budget, remain creative. Consider finding other teams who could benefit from a part-time data scientist, too.
If their salary isn’t in your IT budget, you can share the cost and the manpower. Splitting the cost for that employee can help you remain within your budget.
Try to share the wealth with other teams, too.
For example, let’s say you had a heavier information technology budget last year. Perhaps you invested in new hardware, scaled up new hires, and made big changes. You likely don’t need as big of a budget this year.
Instead, limit your budget and share the wealth with another team. Ask your manager if your budget could benefit someone else. Then, when they need to scale down in the future, they’ll return the favor.
Don’t forget to consider outsourcing. Keeping the bulk of your services in-house can lead to unnecessary costs. Instead of developing applications or processes internally, look elsewhere.
You can increase your workload while cutting costs. Outsourcing is often more budget-friendly than adding new staff members.
For example, you can outsource your help desk, cloud computing, or other support areas.
If you’re struggling to work within a limited budget, don’t hesitate to ask for help. Turn to someone who has experience with business planning. They can help you make the most of your budget.
For example, you can turn to a peer or industry analyst. They can provide you with a realistic assessment. They’ll help you set reasonable parameters within your budget, too.
You can also benefit from improved reporting. Speak with your finance department. Ask them for the data you need regarding your IT spending in the past.
Their reports could help you make more informed decisions regarding your budget.
You might find ways to root out waste and improve your spending. Reducing inefficient processes and optimizing can save you from unnecessary costs.
Try to build internal support, too.
First, make sure to remain transparent with your team. You don’t have to remain secretive about your budget. Instead, you can learn from your team.
Ask them about their needs. What items would they prioritize? Where do they make the most of their IT spending?
Speak with C-level executives, too.
Asking for help will ensure you find ways to make the most of your budget this year.
Save or Spend: 5 Secrets for Working on a Tight IT Budget
Don’t let a limited budget impact your productivity. Instead, use these five tips to work within your tight IT budget. With these tips, you can make the most of the money you have without overspending.
Then, you can start allocating funds to the IT areas that matter most.
Searching for more useful tips and tricks? We’re here to help!
Explore our latest guides today to get started.