New Year, New Budget: How to Cut 2021 Business Costs
If you own a company, you are quite familiar with budgeting. Creating and adhering to a budget is essential for the livelihood of your company. Like every other aspect of your company, your IT services are a valuable asset to your firm foundation. Procuring outsourced IT like these managed services in Indiana can give your company a much needed, cost-effective boost.
You want to keep in mind a few things when creating a budget for your IT department in 2021. Here are some areas you want to pay attention to when making business costs in IT.
Last Year’s Budget
Chances are, if your business is well-managed, you have an IT budget from the previous year. Maybe you overshot that budget and needed to throw it out, or perhaps it was forgotten entirely as 2020 reached its peak. However, you should probably fish out that budget from wherever it disappeared and review it.
This is a great place to start locating your budget downfalls. Where do you want to make changes? Where should you begin making changes? Does your team use Windows XP still, when they should be upgrading to Windows 10?
Using your new budget, how can you improve the functionality of your team?
Create a comprehensive list based on what you did last year, what you want to do this year and any out of budget spends. If you did a significant update on equipment because your team needed advanced computers to work remotely, then you will not have to worry about it this year.
Last year’s budget can also help you to notice spending patterns or recurring expenses.
Monitor Recurring Expenses
Some IT costs will not vary from year to year. There are common recurring IT expenses that should be included in every budget. These regular expenses include:
- Upgraded cloud storage
- Software licenses
- URL registration
- Content management systems
- Domain registration
You might have different recurring costs–costs that should not be recurring, perhaps? Closely examine what your business does with its money and start weeding out the unnecessary expenditures. This will give you some wiggle room to make some necessary changes in the budget.
It could be high time to update your IT equipment if you haven’t in a few years. Computers, software, and online security are becoming more advanced every single day. This leaves old equipment to lag, and often hinders the productivity of your employees.
Take a moment to compile a list of your IT equipment stock. Note how old the equipment is and determine what needs to be updated. Keep in mind that the year is now 2021!
As a rule of thumb, desktop computers and laptop computers are generally updated every three to five years. Five being the maximum as it probably will not keep up with the speed of brand-new models.
If you can, get rid of those dusty, old models and reward your team with some shiny new equipment!
However, it is best to categorize your budget into two separate groups: the wants and the needs. Additional categories include the nice-to-have column and the optional. Keep your focus on the equipment that is necessary to ensure a successful year for your IT.
Wants Versus Needs
Naturally, you want your business to be ahead of the curve with the best servers, equipment and sleek designs that money can afford. Unfortunately, especially if you are a small business, money can afford only so much.
Different companies also require different resources and needs from their IT departments. First, you need to determine how vital your IT is. If you are a company entirely run online, it is crucial to the success of your business.
In that case, you might have more needs for the viability of your IT than wants, like top-of-the-line equipment. Possibly, a company cell phone if they are called often.
You need to estimate your company’s ecosystem, set expectations for your IT solutions, and be realistic with your budget. Don’t cut corners if you could be saving money elsewhere with unnecessary wants.
You should have long-term goals for every single one of your departments. Maybe you want to have the most efficient IT solutions in your region, or you expect to grow your marketing department for more significant projects.
It is helpful to outline these long-term goals and determine how they align with your budget. Instead of hanging on by a thread, your budget becomes an investment of your company’s future. This is especially important with more considerable assets, such as data centers or IT infrastructure projects.
Now that you know where to start, these techniques ensure an orderly, realistic overview of where you can perfect your IT budget. If you feel inexperienced about budgeting, you might want to hire a consultant to look at your expenses and help you determine where to cut costs. When hiring a consultant, they can help you to make more sound choices and accurate expenditure predictions.