As the 2017 calendar year approaches quickly, many business leaders will be tasked with putting together a technology budget. Here are a few things to keep in mind.
- Managing End of Life: Keep an eye on the end-of-life dates for your hardware and software. If your firewall is going out of support or if your Microsoft Server Operating System will soon reach end-of-life, be sure to put in a line item for those projects so that your CFO is not surprised.
- Don’t Underestimate the Cost of Cloud Migrations: If you know your server needs to be replaced but you are unsure about replacing it with an on-premise server or Cloud services, make sure to budget for the migration costs. When going to the Cloud, you MAY eventually realize some cost savings but most of the returns will be in future years. The cost to migrate your data to the cloud is almost as significant and sometimes more so than rebuilding that server on-site.
- Spread out your Capital Expenditures: Forecast out several years. This allows you to move capital expenses forward or backward in time so that you can spread them. If you are due to invest $200,000 in one year, it is valuable to know expenses the year after are forecasted for $50,000. You may choose to spread out your projects and even out that capital expense.
- Avoid Sticker Shock: The longer we look at a number, the more comfortable we become with that number. If you know you need to do a major upgrade in 2 years, start talking about the number now so that in two years it is easier to get approval.
- Licenses and Warranties: Don’t forget about these. They can add up between firewall security subscriptions, server warranties, etc. Plan for these so that they don’t cut into your project money.
- 5-Year Lifecycle of PCs: It is prudent to replace PCs close to the 5-year mark to ensure that you don’t get too far behind and slowly sap productivity with dated machines requiring constant maintenance. Get these replacements in the budget.
- Round Up: Stick with high, round numbers and then round up further. If you budget $10,000 to replace your firewall and can get it done for $8,319.00 everyone is happy. If you budgeted $5,000, it can be difficult to get the additional funding.
- Regulatory Changes: The IT regulatory environment is not likely to get any simpler. There have been significant changes that will impact budgeting in 2017. Businesses that deal with sensitive credit card data will have their hands full complying with PCI DSS 3.2. Released earlier in 2016, the deadlines for implementing these changes are looming. Changes include allowances for dealing with EVM chips, multi-factor authentication, and penetration testing.
- Security: Security investing is never finite. How much is enough? One approach is to make room in the budget for security improvements every year. Make a list of security improvements that would benefit your company. Prioritize that list and be sure to check off at least one improvement every year so that you are constantly enhancing your security posture.
- New lines of business and applications: Is your company planning to roll out a new product that may require additional IT services? Sit down with the company leaders and learn where they want to go. For example, there will always be opportunities to use apps and mobility to improve business operations. Not accounting for this in the budget may make it harder to achieve these objectives down the road.
It is important to prioritize your needs and be able to “sell” the value they will provide your organization. State your case in business terms, associating these projects with productivity, supportability, and business continuity. CFOs will be much more likely to approve technology expenditures when they can connect them directly to business benefit. This step adds work to this process but with good presentation and clarity, your budget will be well received.