You’ve heard it before. The vast majority of IT budgets continue to expand, year after year.
Digital transformation is rocking every organization in every industry, and IT budgets are adjusting to meet the demand business leaders are putting on IT to adopt the latest trends.
For instance, according to a recent Spiceworks report, the rise in budgets comes partly due to CEOs and other organizational leaders making claims that their organizations are ‘innovative’ and ‘secure.’ Now, budgets are rising to make those statements possible.
Costs Involved in an IT Budget
However, blindly raising your IT budgets without proper planning can prove devastating. Below, we dive into several costs that can quickly add up and decimate your IT budget if you’re not careful.
1) Legacy Application and Server Performance Issues
Unexpected crashes, ineffective dashboards, or any number of reasons can make legacy applications and servers a burden on an organization’s infrastructure.
This can have a great effect on your employees. Inefficient processes not only force your employees to spend more time than needed on a single task but can also lower morale due to frustration.
2) IT Support and Maintenance Costs
According to a recent BMC report, the majority of organizations have reported that ongoing maintenance and management of legacy applications and servers increases either moderately or significantly as time goes on.
If you’re looking at your IT budget and satisfied where your maintenance and support costs lie, be careful not to get too comfortable.
3) Cyber Security: Backups, Disaster Recovery, and Business Continuity
On average, the cost of recovery from a cyber security attack on small- and medium-sized businesses (SMBs) is $500,000, and that cost can go as high as $2.5 million.
Fortunately, CIOs and other IT decision makers understand the importance of cyber security. For example, in 2019, cyber security is front and centre in IT budgets.
But that doesn’t mean you can take a lax view on cyber security. After all, many of these common oversights can double as cyber security oversights, and cost your business millions.
4) IT Staff
Hiring and Ongoing Training
It takes time to train new hires during the onboarding process. In fact, it can take anywhere from 8 to 26 weeks for an employee to achieve full productivity.
This means that for the duration of their training, both they and whoever is training them are far less productive, which in turn may impact your IT efficiency.
Recruiting IT Specialists
In many cases, especially within service desk areas, turnover can be quite high, and you may need to spend a significant amount of time recruiting new staff. Many organizations opt to use a search firm to be able to more accurately track the costs of hiring new IT support agents.
Too Much Overtime
It’s common practice for IT professionals to work longer hours to resolve an issue. However, these problems don’t occur in isolation.
The failure of one system can often expose failings in other areas. This means that when an issue does occur, it can result in a significant amount of work to get everything up and running again — resulting in significant overtime costs.
5) Office and Data Centre
Don’t overlook utilities when examining your IT costs. Due to the significant energy needs of your machinery, your IT department will go through a disproportionate amount of electricity.
As well, these areas also often require much more intense air conditioning solutions, as the heat created by computers, servers, and any other technology can have a negative impact on the data centre’s performance.
Consider the costs of maintaining all of the hardware in your organization. Each employee may have a combination of a laptop, PC, or company smartphone, and those devices need to be updated on a regular basis.
While the industry standard for PC upgrades is currently five to six years, you do not want to be caught off guard. Otherwise, you may find yourself in a situation where a number of employees are all requesting upgrades at the same time.
Service IT areas are generally quite busy. The constant movement can wear down furniture, carpeting, and other equipment at a faster rate than other departments.
In addition, IT support tends to have a lot of machinery in and out on any given day. Depreciation needs to be accounted for, so you can anticipate the need to replace these items.
Read More About IT Budgets:
- IT Outsourcing: Finding the right balance
- IT Spending: Current Averages and Trends
- The Cost of Do-It-Yourself IT for SMBs
How to Plan Your IT Budget in Alignment with Your Business Goals
It is paramount that your IT budget aligns with the business goals set by your organization. CIOs are constantly battling to prove the strategic value of IT, and ensuring that IT costs are forwarding business objectives is required to achieve that.
Otherwise, you may find yourself in a situation where an IT project has been deemed a waste and those precious resources have now fallen to the wayside.
Take Control of Your IT Budget
Reducing your IT expenditures begins with understanding your organization’s relationship with your technology — the resources required to operate it, the direct and indirect costs, and ultimately whether your IT is supporting your business goals.
PCM Canada’s approach to addressing your IT needs resemble that of a true business partner. We are a complete IT solutions provider that allows you to dramatically save the costs, through a complete suite of implementation, support, and consulting services.
Our guidance and award-winning approach to delivering products and services are designed to provide your business with maximum value. Contact us today to book a free 30-minute consultation to learn how we can help your business.