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Despite relying on technology for business operations, many small-to-medium-sized businesses (SMBs) have not made IT planning and budgeting a regular exercise. For some companies, this might point to a lack of communication between IT and the other departments. It could indicate that IT is not viewed as a strategic driver for company objectives. It could also be a result of the immature and reactive nature of the company’s IT and the lack of an IT strategy plan. Executives and business owners understand the role that budgeting plays in meeting the company's financial goals. The results of including IT strategy in the budgeting process will give your company three benefits that can make your business better.
1. Get a Technology Lay of the Land
Working with the IT budget process as part of a comprehensive IT strategy plan forces you to look critically at your current situation. What do you have to work with in regards to technology assets? Do you have a record of your hardware registrations and warranties? Are you tracking your software needs for updates and replacement? Are there modules of your specialized business application that you need or don’t use?
As you get a lay of the land for your IT environment, you can start to list the places where you see opportunities for improvement, as well as gaps in capability.
2. Prioritize IT Needs and Initiatives
Needs will obviously surface as you evaluate where you are with your technology and compare it to where you would like to be. In an immature IT environment, resources will need to be allocated for basic needs such as replacing workstations and improving infrastructure so the business can continue serving customers.
When the company has a reliable technology framework, the business is better positioned to implement an IT strategy that will use the technology budget to fund initiatives that help meet department and company objectives.
Read: IT Strategy Quick Start Guide
3. Prevent Downtime
Preventing downtime by adequately budgeting for IT needs will save money. The cost of downtime is measured in employee time. Employees can’t work while the network is down or when their computer has crashed. Downtime can tank customer confidence in your ability to meet their needs consistently. They are most likely relying on technology tools to get real-time data on the delivery of your product or service so that they can, in turn, serve their own customers. Downtime can make you a weak link in their supply chain. In addition to the cost of employee time and customer confidence, downtime can cost more to remedy than regular maintenance and refreshes.
Help with the Budget Process
If you are working with an IT support provider or evaluating a future partnership, ask how they can help you with IT strategy and budgeting. Can they provide assistance and input above and beyond their fixed monthly fee? A spreadsheet to track technology assets might seem cheap and easy, but in reality, it will take more time to manage.
Your managed services company should have tools that track asset data and provide alerts when updates are available or warranties are about to expire. The data should be used to predict when the asset will need to be refreshed or replaced, avoiding downtime and contributing to employee productivity.
IT Strategy Includes the IT Budget Process
If your IT managed service company employs a process that includes collaborating with you on IT strategy planning, your conversations should automatically include the IT budgeting process. They should help you gain all three benefits of IT budgeting by helping you analyze your current situation and recommending priorities for fund allocation while avoiding the high cost of downtime.