Best Practices for Budgeting for Tech, According to IT Pros

Information technology is the glue that holds our digital world together. None of our modern business systems could operate without the hard work of IT professionals who support computing infrastructure, services, and devices. However, keeping these vital components running efficiently is impossible without adequate funding.

Unfortunately, securing the necessary budget is a constant struggle for many in IT, especially in organizations where budget approvers don’t have a firm grasp of technology.

But there is a good way to make the case for more funding. When you spend more money on technology wisely, you get better results. Every year, Spiceworks conducts in-depth research on IT budget planning in our State of IT report. In a recent edition of the study, organizations reporting better results across many common IT metrics (e.g. application uptime, customer satisfaction, protection against security threats, proactively preventing issues, and more) are also more likely to increase budgets and adopt emerging technologies.

What are the secrets of IT professionals use to secure the funds they need? Over the years, many IT professionals have offered tips on how to navigate budget funding obstacles. Check out the following quotes, straight from the mouths (or keyboards) of Spiceworks Community members.

Advice from IT Pros for Convincing the Boss

Budget Best Practice: Justifying Business Expenses to Budget Approvers

There are always more things to spend money on in IT than you have, so its a matter of prioritizing best bang for the buck and justification of why it needs buying at all. How will spending $10K on this result in more than $10K in new revenue or eliminating cost? If your accounting department has different general ledger codes for things like computer hardware and software purchases, telecom & internet, warranty/maintenance, and other subcategories, you might be able to establish a budget based on past years’ spending, then decide whether it should be more and if so, why, to support cost increases or particular projects.?

—Dzee, IT Department Head (USA)

Budget Best Practice: Continual Evaluation

I always try to make sure that management knows what IT is doing to keep the business running efficiently. I never submit a budget without a presentation to the CFO or CIO that lets them see how we are driving change and efficiency. One of the big things I always like to point out is how we are able to reduce operating cost through the use of technology; whether it’s through process improvement, end user training, or renegotiating/eliminating contracts and fees. I’ve found that the budget process is an ongoing process not a once a year event. More often it seems like it’s more marketing than actual accounting.

—birdra, IT Manager (USA)

Budget Best Practice: Explain the Return on Investment (ROI)

I have found it easier to demonstrate ROI for items such as tech refresh of aging computers AFTER a major failure in an old piece of computer equipment that no longer is supportable. It is challenging to justify expenditures for what-if scenarios that have not occurred yet, but accountants are more accepting of expenditures to prevent a failure which has cost the company thousands or millions of dollars in the past.

—Bob2213, Network Administrator

Budget Best Practice: Highlight the Opportunity Costs

The bottom line is understanding and passing that understanding along to decision makers that the cost of protecting and maintaining the systems is far less than the loss of revenue that could impact the business if the systems were down due to any of the issues listed previously. Not to mention the hit on the business’s reputation for failing to protect itself, be able to provide service to their customers as well as protecting their customer’s data. The loss or failure of your equipment could potentially result in the downtime for the business resulting from:

• Time spent attempting to get systems back online
• Obtaining replacement parts such as hard drives, power supplies, or other items such as network components
• Data restoration – assuming you have backups available
• Travel time for admins to access the site, address the system state, notify stakeholders and begin restoration/recovery

—Lane3499, IT professional (USA)

Next steps

Equipped with this advice, you can start to work on justifying the budget you deserve, so your organization can use technology to accomplish its business goals. Ideally, it’s a win-win situation where both IT departments and senior leadership can both benefit from properly funding technology initiatives.