Planning isn’t just a good habit to get into; it’s an essential part of your business processes. A plan is a blueprint. It lays the foundations of how you’re going to get to where you need to go, providing a roadmap to success.
When it comes to your annual IT budget, it’s critical to build a solid plan to set you up for success. IT is becoming ever more influential in business, with Spiceworks estimating that 66% of all companies are gearing up to increase their budget for 2024. Yet, an increase in spending without a plan is a fool’s errand and can cost your business in the long term. When it comes to your IT: if you fail to prepare; prepare to fail.
Planning an IT budget ensures you access all the benefits of IT without overspending or getting unnecessary services. Learn how to build the perfect IT budget for 2024 as we guide you through the key steps.
The importance of an IT budget
An IT budget is a financial plan that outlines the expected costs towards a business’s IT needs. It outlines the specific fees for each service and expense associated with IT, providing useful data on your entire IT stack.
An IT budget is a critical aspect of overall business management. It enables monitoring and tracking capabilities while clearly outlining how your current IT adoption is benefiting your business. Overall spending on IT is constantly growing, with Gartner forecasting that worldwide IT spending will grow 8% in 2024. As demands for IT increase, a well-planned IT budget will ensure that your 2024 IT strategy is well-optimised.
An IT budget provides multiple benefits for a business, and you can’t afford to miss out on them.
Optimised financial planning
An IT budget makes your spending more deliberate and considered. Instead of allocating a budget as you go throughout the year, you’ll have more structure over resources. This supports overall business budgeting and provides an accurate estimation of your total IT expenses for the year.
Enhanced Decision-making
Knowledge is powerful. An IT budget gives you more information about your IT to help business leaders make informed decisions about what’s working and what isn’t. With an optimised IT budget, you can evaluate the cost-effectiveness of your IT support, providing context to help future funding decisions.
Boosted Efficiency
A budget can help businesses prioritise IT support and services that provide the greatest benefits. This gives you the capacity to focus resources on the projects most likely to deliver the greatest impact, making the business more efficient. When resources are low, knowing where best to invest in IT makes it more effective.
9 Steps to build an IT budget for 2024
1. Learn from the past
Treat reviewing your IT budget from previous years as a launching pad to build a great IT budget for 2024. Your prior data gives you a baseline and indicates how your budget may fluctuate over the year. With this foundation set, you can then make tweaks to make your budget more effective for the technology investments that you have planned for 2024.
Reviewing past budgets prevents you from having to start planning from scratch, while also giving you useful data to inspire how you’re going to alter your budget to benefit you more this year.
2. Establish your priorities
No business has infinite resources. When planning your IT budget for 2024, you need to be picky on what areas of IT you want to focus on for the year to maximise potential. Look at what benefits your business the most as these should become your main priorities for the upcoming year.
Think about the overall goals of the business and identify areas in how IT can help achieve those. Technology should be used to push your business forward, so establish what is needed from your IT this year to hit your goals. Once you know your priorities, you’ll also be able to set ITSM metrics & KPIs to track performance against these goals. Aligning your business objectives with IT usage is a core aspect of IT support.
3. Work out your expenses
Gaining a clear understanding of your recurring IT expenses early is hugely beneficial when planning an IT budget for 2024. There are going to be many costs that remain consistent throughout the year, and being aware of them makes it easier to plan around them. Expenditures like staff salaries, software licences, telecoms, and your network infrastructure are costs you’re going to ensure you have the budget for all year round. Only then can you think about cost saving or adding additional services in your IT budget.
At this point in the plan, it’s important to also identify any upcoming, one-off expenses. Processes like installing new company-wide software or updating hardware can increase your overall spend. It helps to be aware of these at the planning stage so that there are no surprises.
Once done, you’ll have a clear outline of your overall costs for the year. It’s useful to compare this with the expenditure of your closest competitors, as this can illuminate if you’re underspending or overspending against industry standards.
4. Audit your hardware
Businesses should audit their hardware annually, and it makes sense to synch this up with your IT budget planning. Conducting an audit gives you a clear understanding of all the IT assets your business has and their overall condition.
An audit may uncover problems with your hardware that you’ll need to rectify, costing more funds as you update your technology to suit standards. Plus, knowing what you have through a hardware audit ensures that you save money and don’t spend your IT budget on devices you don’t need.
5. Research Vendors and Solutions
At this point in the plan, you’ll have a good indication of the types of IT services and support you’ll need over the year to achieve your business goals. It’s critical that you spend time during the planning phase to research all the possible vendors that can provide this service.
When researching, make note of the overall prices and features of the services so that you can budget for the most effective option. This phase of planning stops you from blindly partnering with vendors or finding solutions that aren’t optimised for your needs. Good research can reduce costs and make your spending more efficient and deliberate.
Finding the right IT solutions for your business can be challenging. Have this pressure taken off you by using an IT Service Management provider to identify them for you.
6. Be conscious of your security
Cybersecurity has always been a concern for businesses, but it’s even more critical in 2024. According to statistics compiled by Embroker, only 14% of businesses are prepared to defend against a cyber-attack. This is why you need to budget for it in your IT plan for 2024.
This is an area within your IT budget that you should be increasing funding, as preventing cyber attacks can help your business avoid downtown, data loss, and financial costs too. Cyber security has always been a mandatory part of your IT budget, but now it’s grown to become one of the core focuses.
7. Don’t cut corners
When drafting an IT budget for 2024, it may seem that some aspects of IT are more critical than others. Although some things will have greater priority, this doesn’t mean you should cut corners and neglect certain parts altogether.
Not funding lesser priority costs like training can cause more problems down the road, affecting you in the long term. Treat all aspects of your IT budget with respect as they all play a part in overall IT delivery.
8. Use data to support decisions
All decisions about your 2024 IT budget should be data-driven. Don’t make changes on a whim; instead, leverage data analytics to ensure you’re making the right choice for your business and IT. If you’re allocating an IT budget to move to a new software to help you achieve a defined business goal, analyse the data to show why that change is better.
Being data-led makes things more objective and ensures that your budget is optimised and more likely to help your business perform.
9. Embrace new technology in 2024
It’s good practice to allocate a budget so that your business can harness the power of emerging technologies in 2024. If you don’t, other businesses in your industry will use these new capabilities to push further.
Having some funds in your IT budget for 2024 will allow you to remain competitive and become an innovator. AI remains the new technology that’s advancing fact, and it’s expected that its adoption within businesses will rise over the year. If new technology allows you to meet your business goals, include it in your IT budget for 2024.
Get our IT support to build an unbeatable plan
Crafting an optimised IT budget is no easy feat. With multiple steps to consider and big decisions to be made, it can be an overwhelming task for an in-house team. Get outsourced IT support to take the pressure off.
At ROCK, our IT support team can aid with the audit, evaluation, and planning of a new IT budget to best prepare your business for the year ahead. We’ll set up the ultimate plan of action to ensure your IT suits your business needs. Our people are experts and can craft a tailored IT strategy to fully optimise your IT to support business growth.
Get the most out of your IT as we create a support service that can transform your business.
References:
- The 2024 State of IT. Spiceworks 2024 [Accessed 5 January 2024]
- Gartner Forecasts Worldwide IT Spending to Grow 8% in 2024. Gartner 18 October 2023 [Accessed 5 January 2024]
- 2024 Must-Know Cyber Attack Statistics and Trends. Embroker 4 January 2024 [Accessed 5 January 2024]
