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When you start your technology budget each year, your first question is probably, “where do I even start?”
When you start investigating new cloud services, cybersecurity services and hyperconverged infrastructure, it’s easy to be overwhelmed. And that’s not even considering buzzwords like blockchain, cryptocurrency and affective AI.
How can you ensure that you’re limiting risk, maximizing upside and choosing technology that add value over the near, medium and long term? Here is our strategy for making smart IT budgeting choices.
Start at the Beginning
The budgeting process is now almost a year-round activity. If your fiscal end is December 31, then you should begin updating priorities and nice-to-have list based on the changes in that previous year to align technology with organizational goals.
The past year has forced a lot of organizations to pivot quickly, especially in deploying remote or hybrid work models. Now that they are past the initial shock, we see increased demand for cloud and mobile solutions. But companies are also looking to secure data and find ways to make their mobile workforces even more productive.
To make these investments take flight, it is important that you can explain IT spending in terms your finance team can understand. It’s usually easy to support costs to individual functional departments because most business applications are supporting the needs of clearly defined groups such as Sales, Finance or HR. Investments in enterprise-wide productivity tools such as Office365 or Microsoft Teams can be defended in a similar manner.
How do you explain the benefits of company-wide, customer-facing technology? I believe it is important to engage business units and managers to align your technology with their business goals. Your IT goals need to be holistic and make the entire workforce more efficient, not just IT processes. Have a conversation with your CEO or CFO about how to provide amazing IT solutions for the coming year.
Do the Research
Solutions shouldn’t only be ranked by expected ROI. They should part of the overall goals of the company. What takes the most amount of time? What is the root cause of customer complaints? What are the biggest risks to the budget?
Your primary tool is Excel, but you should be pulling from financial reporting systems, ERP systems that track data and sales tools to gather information to build your budget. Spend time researching your inventory tools and track lifecycles and warranty information to see when technology needs to be replaced. (At Elevity, we talk to clients on a quarterly basis about lifecycle and budgetary topics.)
All of this information will ensure your departmental leaders understand the budgeting choices being made.
Winning the Budgeting Game
Your primary considerations are cost, scope and timeline. But one thing that differentiates amazing IT from ordinary solutions is something that is less tangible- energy. Look at the organization’s goals and business trends to look at IT projects on your plate and see where the most value is. Do you have the time and resources to make your investments pay off?
You want to consider how much organization energy is behind a project. Is the scope of a project going to overburden IT, and will it affect other departments? IT crosses all departments now, and we see more and more input from departments in any project. Elevity project managers make sure to engage departments and executives early in any project.
Remember that there are risks in NOT investing in some technology. Phishing and ransomware attacks are on the rise and it is difficult to explain the need for cybersecurity budgeting if your organization has never experienced an attack.
Of course, this budget is a living document and will change during the year, depending on business conditions. As we’ve seen with recent pandemic-induced uncertainty, the budget can change quickly. The annual budgeting season—like death and taxes—is inescapable. Whether you realize it or not, the 2022 budgeting season has already begun.
For more information, check out the recording of our recent Coffee Break webinar on Budgeting for Amazing IT.
If you need help with this process, Elevity’s vCIOs hold regular business review meetings with clients to keep the technology roadmap current and help with any new business goals not previously reviewed. We call it a Strategic Business Review, but the important part is to provide a roadmap with specific targets to meet. Talk to us today about how to start the conversation.
