IT budgeting occurs when a company specifically allocates money to specific IT programs within the company. This budget should list funding for all projects and technologies within this department.
Expenses included in an IT budget may include staff salaries, as well as one-time expenses for certain projects. For the most part, companies prepare an annual budget but in certain cases, a company may create a specific budget for specific projects or quarters.
Creating an IT budget should not be difficult, but in order to be successful, it should be created with specific goals in mind.
Reasons Why Your IT Budget Failed
Although you may have spent countless hours creating your IT budget, there are a few common reasons why your IT budget failed.
Not taking enough time to let the budget work
Overpaying for Equipment
Budget Lacks Balance.
Not Making Proper Adjustments
Didn’t Budget for Annual Expenses.
No Emergency Fund
7 Tips When Your Budget Falls Apart
#1 Reevaluate Your Budget
If you are struggling to keep your budget together the first step is to reevaluate your budget. Where are you spending the most? What aspects can you save on or decrease in spending?
#2 Reconstruct Under One Contract
Rather than pay for your support from one contract and your equipment from another, wouldn’t it make sense to place it all under one contract? This accounts for huge success when budgeting. By going to one provider of maintenance, support, and equipment, you save money and time.
#3 Negotiate Support Terms to Your Benefit
Don’t pay for coverage that you do not use. If you are using certain services then you should not be paying for them. Negotiating a support service contract tailored to your company’s needs can free up hundreds of dollars.
#4 Search & Save on the Secondary Market
Similar to purchasing cars, there is really no need to purchase your data center equipment. Purchasing your equipment on the secondary market, from suppliers such as Reliant, allows you to maximize your budget for the same results.
#5 Stop Upgrading
When your equipment becomes EOSL (end of service life) or EOL (end of life) your first instinct may be to purchase new equipment. This is not what you want to do. Instead, extend the life of your equipment.
#6 Third Party Maintenance Support
Although your OEM (original equipment manufacturer) may not support your equipment through EOL or EOSL, a third party maintenance (TPM) provider will. The benefits of Third Party Maintenance are huge. By purchasing TPM from a provider like Reliant, not only can you save up to 70%, but you can fully cut back on maintenance costs and save your budget as well.
#7 Set a Realistic Budget
Don’t get overzealous, on paper it can seem much easier to save on expenses. Set your company up for success not failure. Shave off expenses gradually not all at once. Most companies won’t be able to save thousands of dollars overnight. Perfecting an IT Budget is a process, trust it.
Benefits of a Strong IT Budget Strategy
There are many benefits of a strong IT budget strategy. Not only does it allow you to focus your time on other important strategies, but it also helps you to manage your money effectively.
Regardless of if you have the funds, it is important to allocate appropriate resources to the right projects. By having a strong budget you can monitor the performance of your company, meet your objectives, and improve your all-around decisions for the business.
A good budget strategy allows you to identify problems before they occur. This allows you to see problems ahead of time and avoid scrambling when the budget fails. Most of all it will help you plan for the future.
How To Create a Successful IT Budget
Compare Your IT Spending to Your Competition
It is important to compare yourself to your competitors because it will give you a general idea of what you should be spending. If you are far above your competitors in spending then you may be able to identify your problem.
Be Aware of What is Happening in the Rest of the Organization
Your IT department’s goals should align with the rest of the business’s goals. Your budget should support the entire company, not only the IT department.
Identify Your Needs
Evaluate Hardware and Equipment
After identifying what your department has available, you need to ensure that your needs will be met. Make sure you have a great maintenance provider and look into TPM (third party maintenance) to decrease budget costs.
Monitor Your Budget Throughout the Year
One huge mistake that many IT departments make in regards to the budget is to put off taking stock until it is due. This can leave you extremely shocked and unprepared. Not only might you realize that you are way over budget before year’s end, but you might also find that some of your equipment has an expiring warranty.
How Third Party Maintenance Supports your IT Budget
Third party maintenance (TPM) is an incredible alternative to original equipment manufacturer (OEM) support contracts. Typically, OEM contracts are restrictive and incredibly expensive.
Third party maintenance (TPM) contracts, such as those from Reliant, offer the same, or better, support for 40-70% less cost. This allows you to spend your IT budget in other areas.
TPM providers are also experts in their field. They offer support 24/7, regardless of where your data center is located in the world.
Typically, OEMs end their service on your equipment once it reaches a certain age. TPM providers offer you the chance to extend the life of your equipment, rather than spend huge amounts of money to replace them when they are still functioning perfectly.