As originally published in the American City Business Journals
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Ahhh… don’t you just love the smell of fresh budgets in the air?
It’s that time of year for a lot of us, and the questions have started popping up almost as frequently as holiday ads: What are the key pieces of a solid IT budget? What’s extraneous? How do you best go about getting it together in the first place?
To (hopefully) make it all a little less daunting for you, I’ll walk you through a tried-and-true method below.
Step 1: The Bare Necessities
First come the expenses that you can’t go without. Take a look at the products and services that keep your network healthy, secure, and operational, and make those your baseline.
Some examples are:
- Ongoing hardware maintenance (services and any required labor)
- Subscriptions for data backup, Microsoft office, or line-of-business applications
- Any impending software or hardware upgrades
Your IT team should be able to give you reasonable estimates for what it will take to keep these essential services running.
Next Step? Ask Questions.
If you have wiggle-room left over after you’ve accounted for the items above, then it’s time to have some conversations with your staff. In a perfect world, what sort of technologies would be available to them? What functions would they be able to perform that they can’t now? What could they do better?
Let them work through those “blue skies” scenarios and see what ideas and themes come to the surface. You might hear requests like:
- A better way to track and manage your customers
- A better way for your clients to pay you (e.g. electronic invoicing)
- A case management system to better organize files
- Tools that allow for real-time communication and collaboration
- An easier way to (securely) work on files from home
- More training on security, or how to use a particular application
List these out objectively, and add your own in for good measure.
Then Organize by Impact
Once you have this list compiled, it’s time to assess how each of them might impact your business if implemented.
This impact might take the form of what I call “soft ROI,” in that you have a gut feeling it will improve your staff morale. Or, it could very directly result in a hard profit increase.
Here are a couple hypotheticals:
- Offering your staff more reliable remote access by way of a cloud solution would allow for greater flexibility and mobility. They wouldn’t have to stress about making it to the office during inclement weather, and they would have the freedom to work from home. This would not only make you more productive (in that “snow days” are a thing of the past), but it would promote better work-life balance, improve staff morale, and generally increase your retention.
- Implementing the right case management system would reduce the amount of administrative work your attorneys are doing. On average they would regain an hour each week, which could be converted to billable time instead. Across 20 attorneys at an average hourly rate of $200/hour, this means roughly an additional $4,000 each week, $16,000 each month, $208,000 each year.
Based on the sort of outcomes you’ve mapped out, organize your initiatives into categories. Which of these must you have? Which would be nice to have? Which are completely unicorns-and-rainbows, if-money-grew-on-trees?
Now you can turn your attention to the costs of the “must-haves,” and fit whatever you can into your budget. Then move to the nice-to-haves if you’re able.
If you make it all the way to unicorns-and-rainbows… give yourself a solid pat on the back because that almost never happens.
The key here is to look at impact first, cost second. Technology, after all, should not exist just for technology’s sake – it should fuel your effectiveness, and drive your business objectives.
What do you think? Do you have a different method for IT budgeting? Have you tried a strategy that ended up putting you in a tough situation?
Shoot me a message at [email protected] – I’d love to hear from you.