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Spot-on IT Budgeting: Seven Tips for Mid-sized Firms

Stacy Jenkins

3 min read

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It’s that time of year – time to get your budget organized! You’ve likely been reviewing office expenses, benefits and employee salaries, but then comes the dreaded IT budget. IT is an ever-increasing line item that can feel like a big black hole.

It might be tempting to just take what you used last year, increase it a little and call it a day. Allow us to suggest a better approach – an organized approach that’s more accurate, but also doesn’t require hours and hours of technology research.

The following is a simpler method that can help your firm forecast more accurately, prioritize necessary spending, enhance firm security and help you gain better control over your spending.

Roadmapping: Assessing Business and IT Needs

The first step to successful budgeting is to separately determine and understand what your firm’s IT infrastructure and IT business needs are. You should be asking your businesses and practice groups what’s getting in the way of their being more productive and how technology is currently working for them. Separately, call on your IT resources to clarify what’s outdated, out of warranty or end-of-life.

Assess the following:

  • Technology Needs to Run Your Business: Software, hardware, storage, DR solutions, document management and security
  • Business Needs of Technology: CRM systems, client compliance requirements, possible mergers on the horizon, office moves and expansion

IT resources will have to help translate the needs of the business into concrete solutions with associated costs. These solutions typically have initial hardware/software costs, engineering costs to put the solution in place and continual costs. Think of it in terms of monthly software license fees, annual warranties and quarterly audits.

Kraft Kennedy helps firms of all sizes create a plan for their technology needs.

Contact us today to schedule a roadmapping session for IT budgeting.

Once you’ve identified all your various IT costs, it’s time to start building your budget.

Budgeting: Next Steps to Plan for the Year

Roadmapping is critical to IT budgeting, but too many firms stop there. It’s also critical to turn those roadmapping ideas into tangible budget numbers.

Budgeting is a more in-depth process, but the following are critical steps to get you started with easy and accurate IT budgeting. Start by creating a budget spreadsheet to capture costs by category.

The Kraft Kennedy team created a sample budget spreadsheet as a model to help build your own budget.

Download the Sample Spreadsheet

  1. With the help of your IT resources, review the needs of your business and then convert each need to a technology solution and its corresponding cost. Think about your firm’s wants and needs separately from your IT system needs. Be sure to include both in your budget.
  2. Create separate columns to document the three core costs: initial hardware/software purchases, engineering fees, continual costs.

  3. Establish a color code in your budget to highlight the criticality of your network tasks against each other and your critical business priorities. In our example we coded red items to be accomplished in 30 days, orange items in 90 days and yellow items in the next six months.
  4. Stop and assess your current security solutions and determine if they need any changes or improvements. Always include security as its own line item to ensure that your firm is proactively taking steps to increase its security posture.
  5. Assess each IT project’s complexity to prepare the firm for the possibility of challenging work or changing time frames.
  6. Price out projects as if they’re external, even if internal resources will be doing the engineering work. There are real costs to those dozens of hours of engineering work, desktop training and research. Request estimates from vendors to turn the lift into a quantifiable cost that can be budgeted. Most will be happy to provide this help.
  7. Finally, conduct quarterly budget updates to track progress and shift your priorities if necessary.

The experts at Kraft Kennedy can help your firm master the challenge of IT roadmapping and budgeting. Contact us today to learn how.