According to the State of IT report 2020, 44% of businesses are planning to increase their IT budget in 2020, up from 38% in 2019. Additionally, 88% of businesses expect IT budgets to grow or remain stable over the course of next 12 months. That’s good news, right.
Unfortunately, the worst part is that most businesses are planning to increase their IT budget to protect themselves from cybersecurity attacks. Another reason for increasing the IT budget is to upgrade the IT systems and switch to modern technologies such as artificial intelligence and 5G. This means that your IT department will be under immense pressure to invest in digital transformation, which will leave little to no room for improving the current systems.
With a recession looming on our heads, companies with a small IT budget will feel the heat. Hackers will look to take advantage of the situation by luring people with scams and fraudulent messages. How can a company use their small IT budget efficiently in such a situation? That is exactly what you will learn in this article.
In this article, you will learn about useful tips to help you make the most of your limited IT budget.
1. Have A Plan
Every organization wants the latest and greatest hardware such as best dedicated servers, state of the art security systems and software but their IT budget does not allow it. That is why it is important for CIOs to decide which initiatives are worth their money and which ones are not. You don’t want to be spending your money on wrong initiative especially with a limited IT budget. That is where proper planning, strategy and effective governance framework can come in handy.
It helps you choose IT investments that deliver more value to your business and help you develop a better understanding of your organization’s mission and people responsible for carrying out that mission. To manage your IT budgets efficiently, you need to create a strategy that aligns with your business strategic goals. CIOs should have a clear visibility into business needs and goals so they can prioritize IT budgets accordingly.
2. Gain Internal Support
People resist change because they are used to their current environment and they don’t want to start from square one again. If you are planning to introduce major initiatives and digitally transform your company, you should also be ready to face some resistance and opposition.
The best way to cope up with that is to gain internal support and build a healthy relationship with C-level executives and other board members. As a CIO, you need allies on board who can support your initiatives otherwise, you will never get your initiatives approved let alone get enough budget to complete those initiatives. Every member of your IT management team needs to take ownership of your budget goals.
3. Never Take Decisions Under Pressure
CIOs make all the decisions, right? Wrong. They must deal with all kinds of pressure coming from colleagues, vendors and stakeholders. In some cases, this pressure can force them to make wrong decisions. Vendors might push them to invest in a new technology, but they might succumb to the pressure and give the green signal without evaluating the cost and business value.
Never fall for sales pitches vendor send you which tells all the benefits of the technology. There might be hidden costs, long deployment time and other caveats that vendors won’t tell you. It is your duty to do your due diligence and see whether the technology is feasible or worth investing in or not.
4. Develop a Financial Model
You might be wondering how can a CIO develop a financial model when they are not the expert of finance? You can work closely with your colleagues in the finance department to develop a financial model by analyzing historic data and budgeting IT costs.
It is highly recommended that you involve your finance department in weekly reporting. Once you have data and a benchmark, you can prevent waste, inefficiencies and unpleasant surprises. Don’t wait for the quarter to end before monitoring your finances, do it on a weekly basis so you don’t end up wasting your money on the wrong projects.
5. Eliminate Waste
If you want to take full advantage of your IT budget, you must identify inefficient processes and redundancies. Replace them with better processes or eliminate them altogether. This will make your organization more efficient by cutting down on waste and reducing the operational IT costs. Invest in technologies that can replace these inefficient processes and automate and streamline your IT operations.
Train your employees and spend money on right tools and applications that can help you minimize waste. Compare different applications and see which one works best. Similarly, you can increase your employee awareness and educate them by investing in employee training. Yes, these are additional investments but it will pay rich dividends in the long term so you should consider it as your long-term investments.
6. Outsource, Outsource, Outsource
How many times did you develop an application in house when there is a better, ready made option available through SaaS and cloud providers? Many IT leaders have made this mistake and they don’t realize that developing software and services in house can be much more expensive as compared to acquiring them through cloud providers.
When you factor in the number of IT staff working on developing the application and the increased development workload, you can easily see that it is better to outsource. In fact, the difference is so massive that IT leaders might even struggle to justify their ROI case for in house development in front of board members.
7. Consult with an Expert
There is nothing wrong in seeking external advice from industry experts and analysts. In fact, they will tell you things that internal sources can’t because they tend to look at things from a completely different perspective. It can also help you set the right perimeters for your IT budget and make necessary tweaks along the way.
Which tips do you use to manage your IT budget efficiently? Share it with us in the comments section below.