IT Budget Breakdown Episode 2: How to Budget For Your IT Infrastructure Costs
In this episode of our IT budget breakdown, we are focusing in on how and when you should budget for improvements to your IT infrastructure.
As a quick recap, in episode one, we discussed breaking your IT budget into four main categories: infrastructure, support, security, and strategy. You should be working to align your spending in each category with what is needed to achieve your business’ goals and keep your IT systems well maintained. You can read episode one here.
4 Steps to Evaluate & Plan Your IT Infrastructure Costs
1. Audit Your Infrastructure Expenses
Before you get into deciding if you want to invest in new infrastructure or devote less to this line item this year, it is important to gather all the information you can on where your money went last year.
When auditing and budgeting for your IT infrastructure costs you should sort expenses into three main subcategories: hardware, software, and service.
- Hardware should include any device or equipment costs. These would be expenses like laptops, desktops, servers, network access points, printers, etc.
- Software should include all your tools like M365, your ERP or CRM, your security software like anti-virus and anti-malware, and subscriptions like Calendly or Zoom. However, we will get deeper into budgeting for security, specifically in our fourth episode of the IT Budget Breakdown. Stay tuned.
- Service should include any costs associated with managing or handling your infrastructure costs. These costs could be server hosting or management, the implementation of a tool like M365, the configuration of a new computer for a new hire, network maintenance, etc.
2. Evaluate the Effectiveness of Your Current Infrastructure
Once you have an idea of where you spent your money, evaluate each cost to determine if it supports a solution that is currently effective and will stay effective throughout the year to come. You want to be asking your team questions like:
- “Does this solution currently fit our needs?”
- “Are we fully utilizing this tool?”
- “Does this solution make our business operations run smoother?”
- “Is this system running efficiently? Does it have a positive or negative impact on productivity?”
- “Will this infrastructure support our business if we experience growth during this next year?”
Evaluating your infrastructure goes hand in hand with evaluating and implementing your IT strategy to help improve your business’ operations. If you aren’t sure where to begin, stay tuned for Episode 5 of this series where we discuss IT strategy.
3. Identify Infrastructure That Needs to Be Upgraded Or Cut
While determining your IT infrastructure's effectiveness, you will find solutions that either currently aren’t effective or won’t be effective in the year to come. When this happens, you need to determine if you can (or should) upgrade the infrastructure or if you need to cut it and find a different solution.
Usually, this step is where having an IT professional like ourselves can be extra helpful. We can help you navigate these decisions and use our extensive knowledge to craft solutions that will best fit your business’ needs. Here are some common infrastructure recommendations we make:
- Move to the cloud. Physical servers are still necessary for some organizations. Still, most likely you are paying handsomely to maintain and store massive physical servers that will only become more expensive as you scale your business. A cloud storage solution can significantly reduce your costs regarding file storage and give your business flexibility. You can read more about moving to the cloud here.
- Switch to a VoIP phone system. Traditional phone systems are becoming more and more obsolete. Utilizing a VoIP phone system for your business can lead to significant cost savings, increased remote work flexibility, and includes features that can help boost your employee productivity. You can read more about switching to VoIP here.
- Cut any redundant services. If you find you have multiple solutions that can perform the same tasks during your evaluation, save yourself the money and consolidate. For example, if you have M365 and are paying for Zoom, transition to utilizing Teams as your video calling solution. You can read more about cutting redundant services here.
- Don’t skimp on security. If your IT infrastructure budget does not adequately support best practice security measures, you will pay for it- literally. We can help you determine if your infrastructure is currently meeting best practice by doing a quick assessment. You can book one with us anytime here.
4. Identify and Plan for Risks
The last step to evaluating and budgeting for your IT infrastructure is to try and account for the unexpected. The future isn’t something we can ever fully plan for (case and point, 2020), but we can always anticipate some potential risks. Some common things to keep a cushion in your budget for:
- If you unexpectedly require more file storage space
- If you quickly grow and need to outfit more employees with devices or licenses
- If you have to change office spaces or go remote
You don’t exactly have to budget for these circumstances but having it on your horizon as potential unanticipated costs can only help you later, should the need arise.
We understand that budgeting and IT infrastructure can be two daunting topics for any business leader. If you would like expert guidance during this process don’t hesitate to book a call with us.