Remember when the annual IT budget was due in September? We used to assume that we could make a fifteen-month prediction. That was back in 2019.
September 2019 was the last time that Chief Financial Officers and IT managers felt reasonably comfortable with their environment. Hardware procurement, software licensing, capital expenses, and talent recruitment followed a known path. We did not know that a worldwide pandemic was lurking just around the corner.
Everything has changed. But most organizations are still striving to compile a budget for at least the next twelve to eighteen months, and they should.
The importance of the technology budget
Recently, I wrote about the danger of outdated technology. It is a risk to your or your organization’s data and brand. Often, a lack of planning and budget leads to a technology crisis and a cybercrime incident.
Did you know that outdated technology is also leading to poor employee productivity? Here is an eye-opening statistic from PC Magazine:
“Over 50 percent of those surveyed said outdated tech had a moderate effect on their productivity, and over 16 percent said it had a major one.”— PCMagazine.com
In today’s hybrid work environment, outdated technology is costing your organization money, and you may lose the talent war. The same PC Magazine survey found that obsolete technology impacted job satisfaction by 57%. As you know, finding and hiring talent in the DMV region is now a competitive sport. You cannot afford to lose trained employees.
Technology budgeting in turbulent times: 5 tips to building a budget
There is no doubt that the business landscape has changed. Your organization’s balance sheet has changed. How do you budget for the next 12 to 18 months and beyond? Here are five tips from Team MainSpring.
- Start by outlining your ongoing expenses. Ongoing technology expenses include staff and compensation, hardware refresh, and software licensure. Be sure to include the cost of finding technology talent like database analysts to manage your key line of business apps that drive revenue. Do you now need to include the expense of hiring bonuses?
- Special Project expenses. Is your organization launching a special project in the next 12 months? Will you need to hire specialized technology consultants? Include consulting fees and funds for additional hardware and software. Do not forget that you need to project expenses for each special project planned for the upcoming year.
- List capital IT expenses. Are you at capacity in your server room?
- If your organization’s business continuity plan has been updated, ensure that your IT budget reflects the change.
- Maintaining a hybrid workforce will impact your technology budget. Ensure that your budget matches the organization’s hybrid workforce plan.
If done correctly, your IT department or partner should be managing and maintaining, reprioritizing and justifying the ROI on your IT budget. It shouldn’t be a race to the finish, it should be an agile, always-adjusting IT budget that helps you make informed, data-driven decisions. In short, it makes your life easier and there’s no last-minute nonsense.
Five lessons learned during the COVID-19 pandemic
What have we learned from the COVID-19 pandemic? In the segment of IT management, many lessons have been discovered. COVID changed the forecast and the strategy. Here are some updated strategy points.
- Review your Cloud usage agreement and compare it to your company’s actual usage. If your company off-boarded employees during COVID, are you paying for Cloud services that remain unused?
- Employees have been away from the office for months. Consider training and continued education in your IT budget. There’s no sense in investing in the tools without showing people how to best use them.
- Did your team put off hardware and software upgrades during the pandemic? Or are you returning to the office to find outdated desktops? Now is the time to plan for technology upgrades.
- Consider hiring consultants to expand your technology footprint. With a change in Work from Home (WFH), hybrid work and learning, and a shift to eCommerce, a virtual CIO may be the answer to your technology growth.
- Lastly, place mission-critical items at the top of your budget. We have all learned the importance of a mission-critical fund.
Prepare for unknown IT needs
As you prepare your budget, be sure to add a new cover sheet. Make a list of secondary items and those that are primary to your technology plan. You may not get all the funds you request, OR you may face another shift in the business environment. Be prepared.
PS: If you would like to work for a Top 50 company in the DMV region, MainSpring is hiring. Be part of the team that helps local businesses grow through technology. Find career opportunities here.