2022 IT Budgeting - Core Networks

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2022 IT Budgeting

Feb 17, 2022 | Business, Managed IT

2022 IT Budgeting: Tips And Pointers For SMBs

Every small or medium business with an IT front or department knows that 2022 is substantially different from 2018. This requires budget planners to alter their 2018 IT budgeting and accommodate the difference.

Whether you’ve in-house IT deployments for operations & ransomware protection – or your IT is handled by a managed service provider – you should have an IT budget.

This article has some IT budgeting-related tips and pointers so SMBs can remain competitive and help ransomware protection.

The Importance of IT Budgeting

IT Budget 2022

Only a small percentage of small and medium businesses have a formal IT budget. That’s shocking because technology keeps everything running smoothly. This type of oversight could prevent businesses from making important upgrades, or having a backup plan when something happens.

Several key benefits of good IT budgeting include more productivity, cost savings, and more reliable technology.

With the rapid growth of technologies and the changes in technology, CIOs are struggling to keep up with everything. Having said that, it is time to plan for the future rather than being reactive and responding to issues, problems, and threats.

IT Budgeting Tips & Pointers for SMBs

·         Involve a technical person in the budgeting process

Most IT budgets are created and approved by non-technical people. The result is that IT budgets tend to be imprecise.

But it can be done well. Take a simple example: how much does it cost to host email for your small business? Typically, a non-technical person doesn’t understand such things because the cost changes as you scale. Similarly, a technical person understands the importance of cybersecurity for ransomware protection and data security.

Numerous other instances also require a knowledgeable person for precise requirements.

As an SMB, the next time you form a committee to create an IT budget, make sure it has a couple of technical individuals.

·         Review previous year’s budget

When you are planning your upcoming IT budget, a good place to start is to review your last year’s IT budget. Compare it with your actual expenses and determine the difference, if any. Part of reviewing the budget is to identify the factors that drove those differences.

It’ll let you differentiate necessary expenses from unnecessary ones. In addition, you’ll know which departments would starve without IT services, and which could do without them.

A thorough look back can give a better understanding of your company’s technology use and tech spending –  making it easier for you to create an accurate budget for the coming year.

·         List all your recurring expenses

An important tip for small and medium businesses is to consider the recurring bills extensively. Recurring expenses are for maintaining and upgrading your computers, servers, and network infrastructure on a regular basis. Additionally, you need to budget for the cost of downtime when there is a network outage or server crash.

Pay attention to your recurring expenses, including:

  • Monthly fees for Internet access, Office 365 subscriptions, and other subscription-based software
  • Cost of electricity to run your computers and printers
  • Fees for managing your backups and antivirus software
  • Fees for website hosting and domain name registration
  • The fees paid to your managed service provider and technology support services.

The key here is to determine even the slightest of recurring bills. Most subscription-based services renew your subscriptions automatically, making it easier to overlook them. Pay attention and identify all technologies your business use, so there’s no hidden cost.

·         Evaluate your equipment inventory

It’s suggested to consider this tip as a two-step process.

Step 1: Evaluate your equipment inventory

Business Laptop and ransomware protection

Start by taking stock of all the equipment your company has in place. This includes servers, workstations, printers, copiers, and other peripherals. Be sure to include any software licenses as well as warranty status for each item. If you don’t already have an up-to-date spreadsheet with this information, now is the time to create one.

Step 2: Determine replacement and upgrade schedule

Once you know what you have, go through each item and determine when it will need to be replaced or upgraded. Consult your IT experts to determine the mandatory upgrades and replacements.

It’s not important to upgrade or replace everything asked by your employees because some of them are just whims. The most important upgrades are the ones needed to operate smoothly and stay competitive.

·         Plan for future

As a small or medium business grows, the need for IT solutions inevitably arises. Whether it’s a new server for file storage, software for project management, network security for ransomware protection, or hiring a managed service provider – you need a way to acquire these products without breaking the bank.

Fortunately, many managed service providers and technology solution services recognize the unique needs of small businesses and often offer budget-friendly solutions.

Technologies or hardware we have today will become obsolete in a few years, so it’s important for SMBs to create their 2022 IT budgets for the future.

·         Create a budgeting contingency plan

No one could have predicted the Covid-19 pandemic and its havoc on IT budgets created by SMBs.

A contingency plan in your IT budget has become inevitable in 2022 and ahead. This is especially important for small businesses. A small business has little in the way of reserves, so it’s easy to slip into debt and hard to get out of it.

A good budgeting rule is to have a contingency plan that is funded in full, if only because you’ll end up needing it. It doesn’t need to be pretty or highly detailed: just make sure you’ve got enough money in reserve for unexpected things.

Final Thoughts: Prevent Breaking the Bank with Unusual Spending on Technology

It can be a difficult challenge to reconcile the costs of technology with the overall business goals.

Even with a clear vision of where your company is going, it is still possible to overspend on technology if you do not have a solid understanding of how that technology contributes to the bottom line.

By following the tips and pointers we provided in this article, you can avoid overspending or underspend on technology.

CORE Networks is a professionally managed service provider with a range of technology solutions, helping SMBs to focus on their core operations while we manage the technology.