What Should You Focus on When Planning Your 2020 IT Budget?
Note: This article was updated: Jan 13
With the end of the year around the corner, if you’ve put off planning your 2020 IT budget, then it’s about time you get going. The technologies you choose to bring into your business today will help you to stay productive and competitive tomorrow.
Why You Need to Tackle Your IT Budget Head On
Advancements in technology are completely transforming the way businesses gets done, so much so that they have the raised the bar of what is considered “business as usual.” Forward-thinking companies have already been investing money and other resources to get the tools they need in order to improve productivity and efficiency, power internal collaboration, enhance the customer experience, and keep their important business data safe. In fact, according to a recent survey from Spiceworks of businesses throughout Europe and North America, 88% of smaller companies plan to increase or maintain their tech expenditures in 2020.
If you are aware of this transformation, but are struggling to decide how to allocate the money earmarked for your IT expenses, you’re not alone. Many SMEs in Ireland are still dragging their feet when it comes to digitalizing their operations.
But, this doesn’t mean you can’t learn how to effectively integrate today’s technology with your operations and business structure going forward.
The Four Core Areas of Your IT Budget
The first thing to learn in this process is that you need to spend your IT budget wisely. In the Spiceworks study mentioned above companies with fewer than 100 employees reported that they are planning on investing their IT budgets in the following areas:
· 35% to hardware
· 31% to software
· 22% to cloud-based services
· 11% to managed services
Of course every SME has its own unique circumstances and needs and may choose to allocate their money in different proportions. But this rundown of four areas of IT investment can serve as a rough guide.
Whether you need to bring in new tools or replace outdated technology, below we’ll take a closer look at each of these four areas in the context of planning your IT budget and examine some key considerations.
1. Hardware. You need to consider if your essential hardware, such servers, desktops, laptops, printers, and mobile devices are able to keep up with today’s tech tools. Old hardware working with outdated software is a ticking time bomb of a security threat. But even older equipment when combined with modern software is a problem. Not only will such a setup be prone to slow operation, freezing up or shutting down, but it can also continue to pose a data security risk. Old hardware systems usually have vulnerabilities that cyber criminals can take advantage of to hack into your network.
2. Software. Sophisticated software systems have made significant improvements to practically every area of operations, from accounting and data management, to communications and collaboration, from ecommerce and data-analytics and to customer service.
But, perhaps the most pressing area of technology for your business to consider is automation. While automation technologies aren’t new, many SMEs still struggle to implement the solutions that can significantly improve operational efficiency and productivity without a big in-house IT team behind them. Many tools on the market today, however, offer seamless integration with existing legacy software so that even if your business is not so tech-savvy, it can still quickly and cost-effectively adopt automation solutions.
3. Cloud-Based Services. Cloud computing applications are helping SMEs benefit from significant cost savings, while increasing agility, operational efficiency and enhanced data security. Many of the software applications that can be installed and operated on your business’ internal network, can also be accessed as a cloud-based software as a service (SaaS) solution. The benefits of relying on cloud applications to handle operational activity include, not having to worry about upgrades, having a solution that can grow with your company, and being able to check, update and manage your data from anywhere you have an internet connection.
4. Managed IT Services. In a managed IT services arrangement, the service provider offers an advanced IT service. In exchange, the customer typically pays a monthly subscription fee. There are many different types of managed IT service offerings, including network monitoring and security, data storage, payroll processing, and supply chain management– activities that would not be feasible with a small, internal IT department
Of particular importance to budget-conscious SMEs is that managed IT services have also evolved to include cloud-based services. Service providers, for example, may offer infrastructure as a service (IaaS), or virtual computing resources accessed in the cloud and working in conjunction with other cloud service providers, such as Amazon Web Services. This setup greatly reduces overhead expenses and allows businesses to focus on their core operations.
In short, don’t approach your IT budget lightly. Dedicating money to your IT solutions and equipment won’t help much if you don’t approach it with a thought out plan.