Consider how much money you make in an hour. As an expert in your field, you can command a higher salary because of the results and value you bring to your clients.
But if your partner informs you that you can’t put off re-tiling the bathroom for even a minute longer, you do what they ask. After the job is done, you do some quick calculations and discover the total cost for your adventure in DIY:
- Time invested = 70-man hours
- Materials needed = $700 +
- Lost time at work + the cost of tools = $1500 +
When you add up all the time and money spent, forking over that $200 an hour for a professional to get the job done doesn’t seem like such a steep price after all.
There is no question your DIY attempt cost you a lot of time and money; money that could have been spent taking your family to the Caribbean to moped your way around the islands.
Which experience offers you more—re-tiling your shower or sharing a gorgeous one-of-a-kind moment with your family?
Is fixing problems you are not an expert in the biggest value you bring to your business and your life?
If your answer is a resounding no, it’s time to set realistic expectations and hire an executive level IT consultant to help you with 2023 technology budget.
What Can Businesses Expect to Pay for Their 2023 IT Budgets?
The SpiceWorks Ziff Davis report The 2023 State of IT shows that 51% of IT departments plan to increase their budgets in the next year.
Many IT professionals have expressed they are expecting their tech budgets to rise over the next 12 months. 26% of respondents in Forrester's 2022 US Tech Market Outlook survey indicated they predict their IT budgets will experience increases of more than 5%.
Guided by these well-established statistics, it is clear that you will need to budget for increased technology expenses for your business in 2023. You should factor into your budget such things as higher prices for computer hardware and software and increased costs for internet service providers and outsourced technology assistance.
While it may be tempting to delay planning for these increased expenses, doing so could put your business at a competitive disadvantage. Those who plan and budget for the increased costs will be better prepared to take advantage of new opportunities and stay ahead of the curve.
Now is the time to begin planning next year's IT budget. While putting a budget together may not sound like fun, it's crucial to the success of your business.
What is an IT Budget?
An IT budget is how much money your company can allocate to different projects and processes to ensure everything runs smoothly from month to month. Your annual IT budget should adequately account for recurring and one-off expenses.
Here's an idea of what IT expenses to include in your yearly technology budget:
- Personnel
- Subscriptions
- Software
- Hardware
- Cloud infrastructure
- Cybersecurity
- IT management
Why is an IT Budget Important?
The IT budget is like a roadmap for efficient operations. It eliminates the need to request resources every time an expense occurs, ultimately leading you down more reliable and cost-effective paths of technology use in your business or organization.
An IT budget should reflect the company's goals while also ensuring adequate resources. It can help guide decisions and initiatives, both within an organization and without.
A budget offers the best way to keep pace with your IT strategy. The information it provides can be helpful, especially when looking for insight into how best to allocate resources to accomplish goals that are important both now and down the line.
Here are our top tips for planning and preparing your 2023 IT budget:
Be realistic with your budgeting
It is quite true that you get what you pay for. Refusing to hire a qualified IT expert to manage, monitor, and maintain your technology assets may save you a few dollars in up front expenses, but at what cost to your business now and down the road?
Don’t fall into this trap. Set a realistic technology budget that includes the cost of hiring the appropriate IT personnel to provide the expertise you need.
Most businesses these days rely heavily on technology. From computers and phone systems to the software that runs the office, it’s important to have a budget that reflects the importance of these tools.
However, many businesses make the mistake of thinking that their full-time employees have time to manage their technology assets for them. This is rarely the case, and as a result, many businesses end up with outdated or poorly maintained systems.
The solution is to include expert/professional help in your technology budget. By working with a team of experienced IT professionals, you can be sure that your systems are always up-to-date and running smoothly.
Ensure you allocate adequate funds not only for the technology assets, maintenance, and projects but also for the outsourced staff you need to monitor and maintain your IT infrastructure for you.
Ensure your budget is guided by an expert
When it comes to your business, you need an expert. You need someone who has the experience and knowledge to help you reach your goals.
An expert can keep you grounded and help you craft a plan to achieve your operational outcomes. Hiring a professional can help you avoid costly mistakes, identify opportunities and potential threats, and develop strategies to overcome them.
Additionally, the right IT professionals can provide the framework, procedures, and methodology you need to successfully implement and manage your security system.
Instead of wasting money on the latest gadgets and gizmos, hottest software on the market, or additional licences, hire the resource who offers you the total package.
It's more cost-effective in the long run and offers you the freedom and flexibility to dedicate yourself to the work you’re most passionate about: running and growing your business.
Evaluate shortfalls in previous IT budgets
Assessing your current budget will help you establish a new, improved budget for next year. By eliminating wastefulness, you'll be able to finance fresh initiatives.
There comes a time when continuing to invest in older hardware and software is no longer the best use of your money. By opting for newer solutions, you not only reduce maintenance costs but also enjoy the benefits of updated technology.
If you're noticing dramatically increased infrastructure costs, moving some resources off-site to the cloud or a colocation may be time.
When you're shelling out too much money for third-party services, hiring someone internally who can take care of various needs may be more cost-effective. The flip side could also hold true. Managed services that provide specialized monitoring and upkeep might be a cheaper way to gain expertise.
Audit your licensing
Software licensing can be expensive. To ensure you’re not spending money on software licenses that aren’t being used or that are underutilized, conduct an internal audit.
Explore new technology options
Integrating new technologies allows your business to automate processes, reduce costs, and improve your bottom line. For example, cloud computing can help your business save money on infrastructure costs and allow you to scale your operations quickly and easily.
Cloud-based applications can help your business improve collaboration and communication and increase flexibility and remote (off-premise) work opportunities.
Assess your IT assets
An outdated IT infrastructure costs your business money. Updating your hardware saves money by reducing operational costs like power consumption due to new energy-efficient components. Ridding your office space of older cumbersome equipment also buys you back valuable real estate that can be better repurposed.
Best of all, investing in more modern technology assets often equates to fewer unexpected and costly repair bills for equipment that breaks down or malfunctions.
Focus on simplicity
The more you can explain to your company's finance team, the faster they'll be able to approve a new budget that includes investments in information technology. Make sure everyone understands each term, so everything runs smoothly regarding funding.
Consider external help for disaster recovery, backups, and incident response plans
As the saying goes, time is money. Some companies cannot allocate resources internally to disaster recovery testing, monthly backups, and incident response planning. In that case, you should plan to pay someone to create these processes and plans.
Add a line item for an IT auditor
Hiring an auditor may be necessary to improve your business's compliance with the CIS framework. Simply buying the latest technology tools won't help your business get ahead. You need to implement them properly, then monitor and make course corrections as necessary to reap the benefits. An auditor can assist you with this.
Be sure to remember cybersecurity insurance
Cybersecurity insurance is a necessary budget item for any company that relies heavily on technology. In the event of a cyberattack, this insurance can help cover the costs of recovery and business interruption.
Start shopping around now for the right policy, so you'll know how much to budget for this vital service.
Study current IT spending habits
Detailed spending is key to understanding your current financial situation. There may be areas where you are overspending. By reducing unused or wasted resources, you will free up budgetary funds to allocate to other places where additional funding is required.
Understand financial limitations
Understanding your CFO's spending priorities and hesitations can help you create a more effective budget. Remember that your CFO wants the IT department to do well so if you can show how your IT initiatives help the company reach its goals, it will be easier gain support and resources.
Think of future goals
Your 2023 IT budget should provide you with the right tools for success in the years ahead. You'll want a solid foundation to support immediate projects and invest wisely into future initiatives when they become available or necessary.
When developing your IT budget, consider both your long-term goals and any strategic initiatives that should be included, such as creating a formal disaster recovery plan. Other things to prioritize may include migrating to the cloud or strengthening your network. By drawing up a roadmap for larger projects, you can make sure no required resources are forgotten when allocating funds.
Analyze your completed budget
Take the time to analyze your budget. Ensure you understand which items are related only to daily operations and those that focus on productivity and research/development.
One of the most important components of running a successful business is having a clear and well-thought-out budget.
With the ever-changing landscape of technology, it can take time to predict your needs two or three years down the road. However, failing to plan and prepare your IT budget can lead to big problems down the line.
Not only will you be unable to take advantage of new opportunities as they arise, but you also run the risk of being blindsided by unexpected expenses.
That's where Twin Networks can help. Our team of experienced IT professionals can work with you to develop a clear budget for your 2023 IT needs. We'll help you identify potential growth and investment areas and ensure that you have a clearly defined contingency plan for unexpected expenses.
With our help, you can rest assured that your 2023 IT budget is well-planned and prepared for the future. Contact the Twin Networks team to learn more about the IT capabilities, cost, and scalability you need for your next growth stage.
