f you're like most business owners, you know that having an effective IT budget is critical to the success of your company. But creating a budget that meets your specific needs can be difficult - especially if you're not familiar with the ins and outs of IT spending.
That's where we come in. At our company, we have years of experience creating killer IT budgets for businesses of all sizes. We know what to look for, and we can help you make the most of your technology dollars.
In this article we will explain the different elements of an IT budget and recommend what you should be spending on what. We'll also provide some tips on how to save money without compromising your company's security or efficiency.
The first step in creating a killer IT budget is to understand the different components that go into it. Generally, an IT budget will include the following:
⬥ Personnel costs, can make up a fair bit of your I.T. Budget depending on how you slice it up. What you want to think about is, who do you call when something isn’t working? Who is going to take responsibility to make sure all the I.T. trains are running on time? Whether you have a full time I.T. person, or it forms parts of an employee’s job role, or even if you outsource to a 3rd party. It is important to keep this cost in mind as it will end up being one for your larger items in any I.T. budget.
⬥ Hardware costs for or the most part this will be laptops or desktops, but will also include things like printers, servers, NAS devices or maybe even a smart board. Keep in mind the lifespan of the hardware you are budgeting for. Laptops/desktops can last anywhere between 3-5 years, between refreshing. Although it's important to maintain and upgrade your hardware, it's typically not as expensive as other components of an IT budget.
⬥ Software costs should also be relatively small. The cost of software licenses has pretty much moved to the SaaS (Software as a Service) model, where you have ongoing fee per month for the license. While you don’t get the satisfaction of owning the software, the SaaS model of licensing does offer a host of other benefits. With regards to budgeting this means, you have a more predictable monthly cost that is easier to plan with.
⬥ Networking costs should be fairly low. A well-functioning network is essential to the success of any business, but it doesn't need to be overly expensive. It should really be a once off cost, followed by monthly subscription for an Internet service. Plan your network to cater for growth, if you have 10 users now, plan your network for 20 people.
⬥ Telecommunications costs should also be moderate. Phone service can be costly, but there are many affordable options available these days.
⬥ Other costs can vary depending on your business. IT training may be necessary for some businesses, while others may not need it at all.
Now that you have a general idea of how to allocate your IT budget, here are some tips for saving money without compromising your company's security or efficiency:
📌 Negotiate better rates with your telecommunications provider. Many providers will offer discounts if you sign up for a multi-year contract. Shop around for providers, don’t just stick to the big ones. Smaller providers tend to be better value for money and have much better support.
📌 Purchase hardware and software through a third-party vendor. If you are not 100% percent across the hardware that is currently out there, then use a 3rd party to provide what you need. Load them up with your requirements and let them tell you the best price. Shop your requirements around to various providers and get the best price. Cheaper is not always better, always remember to check the fine print like warranty terms, how long it lasts, and weather it is onsite or a depot return to get repaired.
📌 Carefully pick the software you want. Go through and make a list of what software you need. All businesses should start with the basics, emails, scheduling and accounting software. Look at if you need other software, maybe a CRM or sales process software. Once you have a good idea of what you need have a look at the solutions out there. The old adage of "You get what you pay for" applies to software perchases. Open source software may be free, but it can require a lot of technical knowhow to get running, and has little or no support. Most major vendors offer free periods to test their product, take advantage of that and take a few out for a spin.
📌 Make sure your employees are adequately trained in using the company's technology systems. This will help reduce the number of support calls and save you money in the long run. Document, document, and more documentation. The biggest time/money saving step any company can take is to document how they do things, especially how they use their IT infrastructure.
📌 Plan your networking hardware. Planning out your network environment is the key to saving your money in the long run. Buying a larger switch is often much cheaper than buying a smaller switch initially, then buying an additional switch 12 months later. Workout how many staff you have, are they using wifi or an ethernet connection? Ethernet connections have better through put, less interference than wireless connections, so save the wireless for the devices that are mobile. If the device is static an ethernet cable is the way to go.
📌 Review your licenses and subscriptions on a regular basis. Nothing is worse than paying for a product you are longer using. Set aside a time every few months to check what subscriptions you currently are using, and which ones you can cancel.
📌 Find the right security solution. Security is a massive and rapidly evolving field for any business. Invest in the software that forms the first line of defense. Make sure every device is protected by a good solid Antivirus solution, stick with the larger commercial ones in this case. Almost all of the providers out there are either monthly/yearly based subscriptions that make the budgeting a little easier. The key with picking the right AV solution is the detection rate, how much it slows the system down, and what level of notification is provided. Most of the business based solutions these days have the ability to notify you if a system has been compromised, which is essential when (not if) you get affected by some sort of malicious software.
📌 Invest in data backups. It doesn't matter how much security you have or how much you've budgeted for software if your data is wiped out and there's no way to recover it. Best practice is to use a backup solution that works away in the background, backups are the easiest thing in the world to forget to do each day, and you'll never need a backup until you've forgotten to do it for a few weeks. This will give you peace of mind knowing that, should your system crash tomorrow, there's a copy of it safely stored somewhere other than on the hard drive in your server.
📌 Invest in a good analytics solution. Be it website analytics or some other form of digital tracking and monitoring tools—to measure how all your IT-related investments are panning out
📌 File storage and collaboration. is another key component of any small business budget, and it's something that most businesses tend to underestimate in terms of scope and time commitment. There are plenty of business-based file storage solutions out there, either with an on-premise hardware solution or a cloud based file solutions. Note of caution with cloud solutions, we often find business run into trouble when they try and leverage single person accounts across all their employees. In choosing a file storage solution you need to make sure that you can allocate accounts to individual staff members and control/audit what is being accessed. If everyone uses the same account, keeping control of your businesses data is next to impossible.
By following these tips, you can create a well-rounded IT budget that meets your company's needs without breaking the bank.
Some sample costs that should be included:
Ok so here goes, let put all of that into perspective.
If you take a small office of 10 people, professional services company, that mostly use the Microsoft Office suite for internal applications.
Ongoing Monthly Cost (excluding I.T. support) - $1,117.00 per month
So if you are looking to replace the fleet of laptops/desktops every 3 years you would budget around $5000 per year (the replacement cost of the laptops/desktops and printer spread out over 3 years) .
Once-Off setup cost for 10 person office - $17,500.
Monthly Costs for IT, refreshing Hardware every 3 years (excluding I.T. support) - $1117 per month
I.T. support - $1000 per Month (Very rough figure $100 per person per month for either 3rd party or internal I.T. support)
Total monthly spend: $2,117 per month for all of your I.T support requirements.
So if you take all the same requirements in the above budgeting, but you subscribe to our Business Support: premium plan, you end up saving around $300 per month. We offer a reduction in some of the monthly subscription costs for Microsoft 365, antivirus/security software fully bundled, and all Tech support included in the subscription. Have a look at the figures below.
Total monthly spend: Overall Monthly Cost for your I.T. support in total would be $1781.00
Here are just a few of the things Intelligen can do for you:
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