It's that time of year, again!
For most of us in the technology world, IT Budgeting time has arrived. And, for even the most seasoned CIO or Technology Director, this can be a daunting task for a number of reasons. IT budgeting involves inventory, forecasting and balancing maintenance against new projects. So, to do this appropriately requires being a little bit "fortune-teller" with a healthy dose of CPA, psychologist and IT guru tossed in.
In other words, it's rough out there.
Having been involved in IT budgeting processes for our clients (and ourselves) for over 30 years, here's 5 tips to to help you nail your IT budget for 2025:
1. Align Organizational IT Strategy with Business Goals
The IT department is no longer a support function; it is integral to achieving broader business objectives. Collaboration to align organizational technology strategy with the company's overall goals, ensures that investments in software, hardware, security, and personnel directly support the organization's growth targets. This critical first step also tends to promote a "got it, use it" mentality that leverages multi-use cases for existing technology in favor of purchasing new. An example of this we see often at Celerit is the purchase of multiple electronic signature applications by different departments. That increases your licensing cost (preventing volume discount), places additional strain on your IT staff and infrastructure (one more product to support) and it also increases your cyber-threat profile.
2. Review Current Resource Allocation
Rushing through the budgeting process can to underestimating costs or overlooking critical expenses. Instead, give your team the time to review your current resource allocation to help gain perspective on what 2025's status quo will look like. By department, but across the organization, they can gather data on past spending, analyze trends, and create a plan for upcoming needs (like expiring technology). This targeted approach helps in more accurately forecasting expenses, including subscription renewals, software licenses, and infrastructure upgrades. It also allows you to plan for new projects or innovations without compromising on necessary resources to maintain what you already have.
3. Plan for (un)Expected Change
Sometimes in IT, it seems like the only constant is change. New cybersecurity threats, shifts in market demand, the emergence of new technologies and a dependence upon a complex global supply chain all impact IT budgets. Planning for change means the inclusion of contingency funds (or variances) that account for the unexpected. This built-in flexibility ensures that your organization is prepared to adapt quickly to external changes, without pushing-off projects needed for growth or slicing through budget items that potentially impact critical functions.
4. Gain Critical Buy-in
Provide yourself with time to gain input from, and then present a well-thought-out IT budget to executives and division leaders. Be sure to include how the technology investments within your budget will drive efficiencies, protect data, and support their initiatives. A clearly defined and well-aligned roadmap makes a strong case for the budget you are requesting because it is centered around what they need. Pushback and delays spent in revisions can be all-but-eliminated by gaining buy-in during the budgeting process rather than waiting until the first draft. For some organizations, it can also ensure that the necessary funds are approved before the new year begins - aiding in timely delivery by your department.
5. Get in Front of Compliance and Security Requirements
Regulatory compliance and cybersecurity remain top priorities for IT departments - especially within the industries where our Celerit teams work best. On top of new regulations and evolving cyber threats, being proactive about compliance and security investments is essential. Get in front of regulatory requirements, evaluate the state of your current security measures, and allocate funds for any upgrades or training that may be necessary to remain compliant and secure in the coming year. Additionally, if you are required to perform any level of vendor due-diligence, note that process in your budget for any new vendors. Planning for the time necessary to evaluate a new vendor will have a direct impact on your implementation schedule.
Taking these 5 steps to prepare your IT budget for the next year now is not just a good practice; it’s a strategic imperative. It allows your organization to align IT with business goals, gain a better handle on costs, maintain flexibility, and stay ahead of changes. Investing your effort into these 5 items positions you and your organization for a more efficient and successful year ahead—one where technology drives growth, not merely supports it.
Don’t wait until the last minute; start your IT budget planning today and set your organization up for a winning year.
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