3 Things to Remember When Planning Your IT Budget

Budgeting. Just the word can send shivers down someone’s spine…especially if that person happens to be the head of a small organization. While it is easily one of the most frustrating and nerve-wracking part of any business, budgeting is necessary.

Planning out an IT budget can be especially challenging, even more so when you aren’t familiar with IT. Do you have any idea how many times over the next year you’re going to need to call up your help desk? How many desktops you’re going to need replaced? How much a software upgrade will cost? If the answer is no, then don’t worry. You are not alone.

As much as any business owner would love to just toss the IT budget out the window, it is an important piece of budget planning, simply because IT itself is such an important part of any business.

To help you work on that daunting IT budget for 2013, we’ve put together some key things you need to think about.

1. Hardware Upgrades

As much as we might like to think that our computer equipment is indestructible, it is not. You can take excellent care of your equipment- clean it regularly, have it stored in a secure location at the perfect temperature, etc.- and it will still eventually fail. Nothing lasts forever.

The important thing to know is when the equipment is going to fail. While you can’t plan for unforseen circumstances, there are some things you can plan for.

For example, a hard drive on a computer will give sometimes you plenty of warning signs when it is about to fail, giving you time to plan and budget for a new one. However, it is important to note that a hard drive will not always give you warning signs, and sometimes will just fail. To learn more about this, read this blog post.

Another example is your server. Most servers will last an average of 4 years (provided you take excellent care of it). Check the date on your server. If it is more than 4 or 5 years old, make sure you work buying a new one into this year’s budget.

Monitors, mice, and keyboards can last a long time if you take good care of them. But it never hurts to have a few extra lying around the office just in case. These accessories are also not incredibly expensive (provided you are not buying some fancy lazer mind-control one).

2. Software Upgrades

If you keep up with your software upgrades, it will never end up costing you an arm and a leg. When people get in trouble is when they don’t do two things:

First, when they don’t keep up with the little updates throughout the year. Software companies are constantly adjusting, tweaking, and fixing little issues they find. Every time they make one of these little tweaks, they roll out a small update. Generally speaking, it is always a good idea to update when these “hot fixes” are rolled out. That way, when it comes time to upgrade to the latest version of the software, it will take less time.

Second, companies get in trouble when they don’t keep up with the latest versions. Now this does NOT mean that you have to buy a new software upgrade every year. That would end up costing you a lot of money and is really unnecessary. What is important is to make sure your business doesn’t fall too far behind. Upgrading every three years or so makes sense. Waiting ten-plus years is a very bad idea. When you wait that long to upgrade, you are going to end up getting yourself and your company into all kinds of trouble.

For starters, making a ten-year jump in software years is a huge gap, one that is almost impossible. What you may need to end up doing is either buying a bunch of upgrades and working your way up to the latest version, which is really difficult because many companies tend to discontinue versions after a certain number of years have passed, or (and this is the more likely scenario) you are going to have to basically start from scratch. Get the new programs and then work on transferring all your existing data (some of which can be done with certain computer programs, but more likely you will end up doing this by hand). Neither of these choices are very appealing; both are incredibly expensive and time-consuming.

3. The “just-in-case” fund

Let’s say for a moment that you are doing everything right. You have good backups that are up-to-date and work well. Your equipment is only a few years old. You are running the latest version of your software. Does this mean that you are in the clear for the year for your IT budget? Absolutely not.

Aside from those predictable costs, there are the costs you can never predict. Natural disasters, new requirements, power surges, user error, etc. You always need to have some money set aside just in case something happens that you could never have seen coming.

Chances are, you already have a “just-in-case” fund for your organization as a whole, but it is a good practice to have one set aside just for IT purposes. IT is such an integral part of any organization that you can’t take the chance of being without it for an extended period of time. So whether you designate a certain percentage of your existing “just-in-case” fund for your IT, or create a whole new one, just be sure you have that money set aside.

Planning a budget is never easy, especially if you’re dealing with a part of the business you are not too familiar with, such as IT. No matter the situation you’re in, make sure you work with your IT professionals to plan out your IT budget for the year. They will have some really great insights and advice on how much money you need to work with for the year.

Questions about planning an IT budget? Let us know in the comments, we’d be happy to answer them!

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