“It seems like every time I turn around, I have to write another huge check for IT.”
Have you ever said that?
While technology costs cannot be eliminated, unexpected IT-related expenses can be minimized. With the right technology planning and budgeting process, you should have a clear idea of what your IT spending will look like for the next few years.
What Are Some Things to Consider When Budgeting for IT?
1. The Lifecycle of Your Equipment
Computers and servers have a life expectancy of three to five years. Sure, the equipment may still RUN after five years, but the risk of hardware failure resulting in data loss and downtime goes up dramatically as equipment ages. It is better to plan and budget for hardware refreshes instead of waiting until it’s an emergency.
Many companies like to upgrade their equipment in phases to minimize disruption to the organization and to avoid a large capital investment at one time. Also, many companies are looking into cloud computing to eliminate the hassle and cost of server hardware upgrades.
2. Application and Operating System Compatibility
As new versions of applications and operating systems are released, they may not be compatible with an older line of business applications or operating systems. Before implementing or updating applications and operating systems, make sure that they will be compatible with your existing infrastructure. If they are not, you may have to upgrade other pieces first to reduce incompatibility issues.
Planning these upgrades in advance will help determine the correct order of events so you do not have surprise expenses.
3. Data Backup and Storage
Since companies are not getting rid of old data, the amount of data that is being backed up and stored on- and off-site continues to increase as the years go on. Companies need to plan for the amount of data they’re going to keep or archive, as well as an appropriate disaster recovery solution for that amount of data.
4. Application Support Contracts and Warranties
Keeping your application support contracts and warranties up to date will help minimize the cost of support issues and upgrades. If there is an issue with the application or if it needs to be upgraded, many application providers will assist in this process at no additional cost if you have a current support contract with them.
5. Bandwidth and Internet Connectivity
As tablets and mobile computing become more popular each year, the number of devices connecting to networks continues to increase. Businesses should plan in advance for the amount of bandwidth they’ll need to make sure everyone can work when they need to.
6. Maintenance and IT Support Costs
As businesses grow, having a properly maintained and supported system becomes critical to the success of the organization. If employees can’t work due to system issues, the business suffers.
Most businesses reach a point where they outgrow their current IT support offering and they look to hire an additional IT person or outsource some or all of their IT. Many times, outsourcing to a managed IT services provider provides companies with predictable results from their IT at a predictable monthly cost.
7. Major Initiatives for the Organization
Implementing ERP or EHR systems, opening branch offices, mergers and acquisitions, etc., will all require planning in advance for them to go smoothly. IT service providers should be able to give you a best-guess budget for these based on their vast experience. Getting your IT provider in the loop early will help eliminate surprise expenses and headaches.
Technology plans and budgets are not something that you can set and forget. Business owners and executives should be reviewing them with their IT provider on a quarterly basis, at a minimum. If there is a lot of activity and change in the organization, reviewing technology plans and budgets may need to happen more frequently.
As featured in the January 19th issue of The Press-Enterprise
Learn more about how to reign in your IT costs at our webinar - "The True Cost of Your Technology: How to Evaluate Your IT Spending."
