Making the Most of Your IT Budget
Worldwide IT spend is predicted to reach $3.7 trillion in 2018, a steady 4.5 percent up from 2017, as forecasted by Gartner. With spend on IT increasing each year, it’s evident that businesses worldwide acknowledge the importance of having a robust IT infrastructure in place to deliver seamless business operations. But, this also means that firms today are challenged with the task to establish mature and structured budgeting practices to optimise IT spend and strategy, each year.
Coming up with, and effectively using an IT budget to support the needs of a growing firm takes a tactical approach, making allocations in line with strategic aims. This blog article explores some key considerations to help you make the most out of your IT budget.
CapEx or OpEx: What’s Your Approach?
The first question firms must ask themselves is whether they are operating under the traditional Capital Expenditure Model, where IT equipment is purchased at great expense and costs continue to rise as systems and machines require upgrading frequently. Firms that buy servers, hardware and software must also consider the storage, maintenance, staff training, power and insurance costs associated with these.
Switching to an Operational Expense (OpEx) approach can help firms reduce costs by breaking IT spend down into manageable amounts, paying for services, equipment and storage as required. Additionally, by leveraging managed cloud services, your firm can avoid the costs of having a server on-site, as well as the need to install and use new software as new challenges arise. This model also gives your business the agility to scale up or scale down as required, meaning resources are freed up for other revenue generating tech opportunities.
Levels of Support
We recommend carrying out a cost-benefit analysis to assess the levels of support your firm currently has when it comes to all things IT, and how much it costs you. The key things to weigh up here are internal IT skills, the cost to maintain them, and the level of support the team can provide your firm’s users. Another key consideration is the size and bandwidth of an internal team when it comes to dealing with any outages or issues causing downtime and disruptions to your daily business operations. By partnering with a reputable IT provider, your firm can unlock 24x7 access to an IT support desk of seasoned experts, all year around. You won’t have to worry about any unforeseen tech issues keeping you from business as usual, due to a lack of expertise. While an internal IT team should be able to fix most issues, the support of an external IT provider is invaluable when it comes to ensuring business continuity. What’s more is that you can get advice and consultancy on utilising the IT at your disposal in the best way possible.
Another benefit of outsourcing IT support is that your firm can avoid the costs associated with building and maintaining an internal IT team. You can choose to completely outsource the department, or, down-scale the size of your IT team to a few individuals. With expert support available on tap your firm won’t need to worry about spending money on training staff to keep up with the IT curve as it continues to shift. And, if you do decide to down-scale or keep a full internal IT team whilst outsourcing IT support, you’ll lighten the load for the in-house team, allowing them to shift their focus from day-to-day IT troubleshooting to longer-term projects.
It’s good practice to assess organisational priorities on a quarterly basis and to adjust your IT roadmap and budget accordingly. Doing so, you can align your IT to the changing needs of your firm, utilising resources in the most cost-effective manner. It’s also important to track return on investment on a quarterly basis, to assess whether the software, hardware or training your firm invests in has brought any value. Returns you get from such investments should be measured in different ways such as operating efficiency and security, not just in monetary terms. You can then truly assess as to whether to continue to spend towards the resources in question.
Don't forget to make the most of your IT budget; it is essential to assess the situation of your firm regularly and to be open to change. IT is ever-evolving, so it’s important to keep up to remain competitive at what you do. This is not limited to but involves assessing the cost-effectiveness of your current expenditure model, levels of support offered by internal IT teams and the cost of maintaining and building them, whilst also keeping good practices in mind to optimise your IT spend.