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IT budgets as bottlenecks; when the wrong budget is holding your business back

Article by Simon Heath on Aug 8, 2019

When you’re the leader of a smaller business, you can get away with cutting some corners and putting things on the back burner for another day. For example, you might ask yourself whether you really need an IT budget, and think it’s something to worry about later as your business gets bigger.

However, this is a slippery slope that can send your company into dangerous waters. The truth is IT has changed. It’s become more embedded into core areas of your business like service delivery, marketing, HR and accelerating the growth of your company. There’s not a single part of your business that IT doesn’t touch anymore and creating an IT budget helps you balance the key areas that need it the most while ensuring other parts of your business aren’t being neglected. IT isn’t just a wish list of hardware and software, but rather the tool that keeps your business running. Then the real question that remains is: how do you use IT services to your competitive advantage to ensure you’re always innovating and growing?

Your IT budget is also a tool that will allow you to implement strategic IT decisions that are in line with your business growth plan. IT and business planning should and must work hand-in-hand, your technology and IT infrastructure built around what the business is planning to achieve. It then stands to reason that the budget is less “new laptops”, and more “what new systems do we need to implement for our fee earners to bill more?”

The indecision on where to allocate budget can often result in hesitation to spend anything at all as business owners are paralysed with the fear of putting it in the wrong place. However, the temptation to cut corners can result in inefficient processes, outdated systems, high risk of cyber-attacks and data loss and, overall, an underpowered IT function that fails to drive your client service delivery. Despite these fears, 89% of companies expect their IT budgets to grow throughout 2019 and the need to upgrade outdated IT service infrastructures is the biggest driver of this increase. Meanwhile, small businesses are making significant increases to their hardware budgets as well, showing that even in the midst of their hesitation, business owners and IT heads are in fact spending.

This then leaves us with the initial question of where to spend that money and how to ensure it is aligning with the overall strategy. In our years of providing IT solutions to our customers we have developed a proven, reliable and trusted framework to ensure your IT budget isn’t becoming a bottleneck in your business:

Give IT a seat at the table

Traditionally, decisions are made and later thrown at the IT department to implement or fix or change, depending on what other members of the business have agreed upon. This leaves your IT resource playing catch up while they try to fit IT into a decision that has been made without them. Your IT function should be involved in defining how IT helps achieve business needs, ensure IT understands the objectives and then mapping IT hand-in-hand with those business objectives. Technology affects every area of your company, which is why it’s pivotal that you give IT the time and space to be involved as early on as possible.

Understand your budgets

Even the best-planned budgets can sometimes go over or under the allocated figure and should you find yourself going into your contingency plan, it’s important to understand why and how it’s happened. Understanding your variance will allow you to set a more accurate budget figure in your next period. Make sure you’re communicating with IT so that you understand each other and can make better use of those budgets and where the spend goes.

Efficiency matters as well

Cost creeps in unexpectedly, so it’s important to understand what things will cost in terms of time, as well as money. Cheaper, but more time-consuming systems often actually cost you more in the long run. For example, cheap printers might seem like a good idea, but how much will it cost you in ink and troubleshooting? Your IT budget should be saving you time as well as funds, taking into account all the hidden costs.

Prioritise security

The latest figures show that small businesses are at greater risk of cyber attacks, with 58% of malware victims categorised as small businesses. It’s easy to think that because you’re a small business, hackers and threats won’t apply as much, when in fact the opposite is true. Protect against risk and ensure enough of your budget is spent on quality security systems and tools.

IT budgets can seem like a daunting task, and they certainly bring their own worries and complexities. However, ensuring your IT department is aligned to your business objectives is the best place to start, and your budget is one of the tools that will allow you to do this. After all, this is not about having enough money but rather ensuring that money is spent on the right things.

Budget for what you really need

It’s easy to want everything when it’s on offer but think critically about what you truly need. Understand your IT pain points, bottlenecks and business needs (not wants), and begin to allocate budget in that way. Drill down to the real specifics and particulars of your needs, looking at it from a multitude of angles. You have a limited pot of money and must decide how to spread it across productivity, core IT services, risk and compliance and innovation, as well as understanding where the priorities are. 

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