Is Your IT Spending Under Control?

There’s no doubt that IT spending is one of the most important outgoings that any business has to control. Many companies, however, don’t have a full handle on their budget in this area. Neither do they understand if what they have is suitable for their business in the first place.

Some business spend too much, others have set their budget way to low. Finding the happy medium that delivers everything you need is a challenge but certainly worth the effort.

Deciding Your Budget

There are a number of different factors that will affect the percentage of your budget that you spend on IT. These include:

  • The sector you operate in. Banks tend to devote 7.16% on IT, according to Deloitte. The building sector can be as low as 1.5 % and the average is around 3.3%.
  • The cybersecurity environment can have an impact on spending. In recent years, following a number of high-profile breaches, many high-risk companies have upped their IT budget by as much as 50%.
  • The size of your business and the budget available is, of course, going to determine quite a bit.
  • The truth is, however, that many companies are underspending on their IT and potentially missing the opportunities that the latest developments have to offer.

IT covers a much wider range of assets than many businesses realise. It’s more than just cybersecurity and operating platforms. Your IT spending also includes the hosting package you have for your website, your phones, the cloud services you use, as well as the software packages that help you deliver your business goals, including your CRM and packages such as Office 365.

If you’re a small business, your IT spending can be spread over a bunch of different areas which makes it difficult to keep track of.

How to Control Your IT Spending

The first thing you need to do is carry out an audit and list everything that you use and how much it costs you. Many SMBs don’t have a clearly defined budget for everything under the IT umbrella and it can be quite eye-opening once they discover what they spend.

1. Look at IT as an Investment

Do you think IT is a necessary evil? Then think again.

The mistake that many companies make is not understanding that IT forms the central spine around which the rest of their business operates. Changing how you view IT is important because it can open up new areas of investigation and ensure you make more productive choices when it comes to the services you employ.

For instance, cybersecurity is an investment not only in your own business but your customers as well. The last thing you want is for their data to be stolen and your reputation damaged. Better collaboration tools that your staff are able to access are also an investment because they improve their productivity which in turn boosts your bottom line.

Stop thinking ‘what do I need’ and start exploring the possibilities that IT solutions can deliver.

2. Create an IT Budget

You may be surprised at the number of businesses that don’t have a separate IT budget. Unless you do, you won’t be able to control your IT spending even in a very basic sense. A clearly defined budget helps you keep track of spending and gives you the chance to decide if you want to put more in particular areas of your operation.

3. Focus More on Productivity

The key to successful IT budgeting is to look at it from a productivity viewpoint. There are many software solutions and cloud-based services that may improve the performance of your business and these are developing all the time. For example, the growth of AI help and support services in recent times could take pressure off your staff and increase customer loyalty because the most popular queries are being answered with little or no time delay.

4. Be Strategic

Finally, it’s no use increasing or lowering your budget unless you are doing it for a reason. It may be pertinent to your business to cut costs but IT is generally not the best area to do this. You always need a good plan and it pays to discuss your options with an IT service provider that understands your needs.

At Cyan Solutions, we can help you better develop your IT spending and keep it under control while really delivering for your business. We provide IT support, cybersecurity solutions, virtual CIO and cloud based services that can really help transform productivity at a price you can afford. Contact our expert team today to find out more.

Our Guide To IT Budgeting

Budgeting for your business is never easy. One of the hardest aspects to budget for is your IT strategy and requirements. Whether you base it on projects, annually or quarterly, it can seem impossible to know how to budget when you must manage costs and prepare for unexpected situations.

However, when IT budgeting is crafted correctly, it can serve as a useful and influential roadmap for the future of the business and the strategy you are taking. Your budget can not only be the plan of finances but can be how you communicate where you want your technology strategy to be and how it can help the organisation as a whole.

A good IT budget will not only help you to prepare for the costs of the project or year but will also help you to set your priorities, so you know what to aim for and what is vital for your business. Not only does the budget help the IT department, but it also helps line managers in other departments. They can see and input the activities that lie ahead and help your IT plans to be supported across the company.

So, how do you start to prepare your IT budget?

How to prepare your IT budget

Firstly, the organisation needs to decide how best to allocate the IT budget. Some organisations want to assign an IT budget to each department and use a chargeback system. For some businesses, this can work, for others, it can be too complicated and challenging to instigate and work effectively. Either way, the IT department itself will need its own budget for day-to-day maintenance.

It is essential to begin your budget so that it provides a level of detail that builds a substantial case for approval but also doesn’t require micro-management. It needs to be flexible but still be a driving force behind your technology plan.

Secondly, you need to include the vital aspects of your IT budget.

Eight essentials to include in your IT budget

1. Upgrades

It is likely that you will need to upgrade outdated software and hardware and it is best to be prepared for the cost of this.

2. Staffing

While some IT staff costs may be covered through the HR budget, you may need to incorporate staff into your IT budget whether you are expanding the team, promoting, increasing training or purchasing new equipment for the team to use.

3. Software

Software can sometimes seem like an unnecessary expense, but software can help to make staff more efficient and productive, which can, therefore, cut costs and boosts profits for the overall organisation. Regarding software budgeting, always run a cost/benefit analysis. Remember, you don’t have to spend your entire budget just because you have allocated a cost.

4. Cloud

The use of cloud technology continues to increase, and your business needs to prepare for it. Whether you expand into more cloud-based solutions, require more storage or need to strengthen your cloud security systems, this will take a chunk of your budget.

5. Mobile technology

Handsets quickly become outdated, and data plans increase rapidly. You need to account for increasing spend whether this is for new employees, upgrades for all staff or incidents when devices are lost, stolen or broken. As well the devices and data, you may need to also account for applications that enhance security such as mobile device management.

6. Training

The IT department has considerable responsibility for maintaining cybersecurity across the whole organisation. As well as strengthening systems internally, the IT department will need to deliver regular training to ensure staff remain complaint with IT policies and do all they can to support cybersecurity for the business.

7. Backup

Your budget will need to account for a backup solution, whether you need data back-up to a variety of locations or upgrading your own backup hardware. Within this you may also need a back-up for internet connection should your chosen solution fail, and you need to get everyone back online quickly.

8. Disaster

Every IT budget should declare a proportion of the budget for disaster planning. There could be many aspects that go wrong, from broken hardware to data compromises or server issues. Whatever aspects that you manage within the IT department make sure to dedicate a proportion to covering any disasters that may occur.

Flexible planning

While it can be stressful to make sure every pound is allocated correctly, it is important to remember that fluctuations will happen, and you need to prepare to be flexible. Always consider your budget as a work in progress and try to tweak it where you need to so that your strategy remains on track.

If you need advice on IT budgeting or are looking to upgrade your technology solutions for cost-saving, security and efficiency, then get in touch with Cyan Solutions to find out how we can help.