A transparent, organized, and complete IT budget makes it easier for your team and company to track and plan for your annual costs, balance your finances, and justify new, innovative expenditures.
The benefits of a well-organized budget don’t just stop there. A better IT budget can also be a powerful tool that'll help you prove the value of IT, plan for the team's future, and keep costs under control.
However, it's also an intimidating project for many CIOs or managers to tackle. Therefore, it's common to put it on the back burner until the deadline looms a little too close for comfort.
When this happens, the result is usually a hastily thrown together plan that'll affect your IT department's efficiency, productivity, and more. This can leads to long-term negative ramifications for your department—and even your company as a whole.
Today, we're explaining why an IT department budget is so important, and how you can develop and create a great plan for your team.
1. Keep Your Priorities Clear
After compiling a thorough list of what you'd like to add to your budget, carefully comb through every item and rank them based on your department's top needs and priorities.
By applying a simple high, medium, or low-priority tag to your budget line items, both leadership and employees will get a more precise idea about where your time and money will be spent this quarter.
You’ll also have a more clear idea of what things might need to be cut if you end up having to slash your budget. This level of advanced planning will reduce panicked or rash decisions if items do need to be omitted.
2. Plan for Surprise Expenses
If seeing how COVID-19 pandemic impacted the workplace isn't a wake-up call to be prepared for the unexpected, I don't know what would be!
Even the best-laid plans can be broken in an instant. As leaders, we have to be prepared for that possibility. That's why you should always include a category for unplanned expenses.
This reserved stash will provide you with the freedom and peace of mind that you can financially handle an emergency quickly and efficiently. While you shouldn’t go overboard, do plan to leave enough in this pot to cover problems like security breaches, sudden website fixes, equipment malfunctions, personnel issues, etc.
3. Justify your Expenditures
Your budget is an incredibly powerful tool. It shows just how impactful the IT department is on your company’s bottom line. A great budget can also prove your team's overall value, and (hopefully!) will leave you with some dough in your pocket for next quarter.
When it comes down to it though, the only person you really have to convince is your CEO. They're the ones that'll give that final budget approval, so make sure you're doing a solid job of justifying your desired expenses.
Ideally, your operations and strategies should already be aligned with your company's mission. If they are, your budget is a wonderful place to show how you’re allocating resources that further the CEO’s vision. Your metrics can further prove how that money is turning into business growth.
However, if your budget report isn’t well-organized and transparent, you'll lose the ability to use it as leverage.
4. Find Areas to Cut Costs
When you track and report expenses, you're automatically following the areas in which IT is spending too much money. Maybe you keep finding that your inventory and supply budget are too high. Or, perhaps the resources allotted for ongoing employee training aren’t delivering.
Whatever these discoveries may be, use this information to better reallocate money and time where it’s needed the most. Now, you can optimize your processes, make the most out of every dollar, and impress the people who are there to support your team.
In the end, the IT department budget is about so much more than money alone. It's about making sure that your team is showing its worth, building an effective financial strategy, and ultimately receiving the resources you all deserve.
Want to learn how to create a smarter IT budget that cuts costs and boosts efficiency? imageOne would love to be your strategic partner! Click below to set up a free, no-obligation consultation with one of our friendly print experts today!