123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Technology,-Gadget-and-Science >> View Article

Simple Steps To Technology Budgeting

Profile Picture
By Author: Kevin Smith
Total Articles: 14
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Accurate estimation of technology expenses is a difficult task; however, it is a critical need for every organization. In these dynamic times, an organization aims to remain updated with the changing paradigm; information technology is a critical capability for effective operations and increased business value. A well-designed technology budget is a key to better cash flow management, improvement in operations, the overall growth of the organization, and groundwork for future technology needs.
IT leaders take into account the multiple variables, discounts, price rises, and internal growth of the organization while budgeting.

IT also has a role to play in every department in the organization in terms of the use of external and internal resources, marketing systems, operating platforms, and other solutions used across the organization. Therefore, organizations must consider their IT priorities prudently and justify the same for a better strategic IT management and success of the organization.

Few steps must be followed for an effective IT budgeting process; otherwise, it may result in investment in technology, which is not critical for the organization or disconnection of the IT department with the other teams, thereby leading to overall inefficient operations. The key steps for technology budgeting includes:

Implement an IT governance structure

Defining a governance structure for IT will ensure clarification on the rights and duties of key personnel in the organization along with the specification of accountability structure for the correct usage of IT. Furthermore, it ensures risk management, resource optimization, and better learning from the past experiences of IT budgeting that can be useful in future investments in IT. For this, the organization must form an IT governance committee to aid the decision-making process. This committee will be responsible for guaranteeing the organization’s capability and efficiency in IT management, the use of the precise standards and methods for its implementation, alignment of IT with the business goals and objectives, and accomplishment of the expected outcomes and ROI.

Audit current IT spending

The IT department of an organization needs to review the IT budget of the last year to analyze the spending and recognize where the changes are required. The IT team must check the budget to identify the recurring expenses and non-recurring expenses as well as leasing versus buying solutions. Some of the recurring costs, which are essential for every year, include the renewal of software licenses, content management systems, cloud storage space, URL registration, web hosting, and many others. Some of the one-time costs include the purchase of a new server, new computers/laptops, mobile devices, and others, which need not be accounted for every year. The IT team must check the need to upgrade hardware and software before finalizing the budget so that a balanced budget can be made.

Set up the strategic goals and objectives

Once the base for the budget is formed, the companies must focus on new, innovative initiatives in IT to remain in trend and have a competitive advantage over their competitors. For example, gaining awareness of the new cyber threats looming over the market, presence in IT conferences for gaining knowledge about new products and platforms, and networking with the right IT experts to understand the future outlook. The annual IT goals and objectives must be reviewed thoroughly to consider the same in the budget for a long-term outlook.

Consult with other departments for required changes

The IT team must ensure that they have discussions with other departments to understand their requirements for any new purchases or upgradations. This exercise facilitates the identification of priorities and needs of the organization and the IT leaders’ duty to take it from idea to reality. However, it is their obligation to check how useful this new equipment would be compared to their ROI. In addition to any new solution or software of technology, the IT team must also factor in the training costs, which is essential as it affects employee productivity.

Align it with the organizational strategy

A collaboration of all the departments with the IT department and alignment of IT spending with organization-wide spending is a prerequisite for the right IT investment decisions. The IT department must ensure that the budgeting aligns with the overall strategy of the organization to remain competitive in the market. The budget document is just a numeric presentation, but it must be well-communicated, well-understood, and well-accepted by the organization in general.

The steps mentioned above are a good way to approach the Information Technology budgeting process in any organization. However, the role of IT leaders becomes crucial in this process to factor for the organization’s cash flow and the total operating and capital budgets. IT leaders must also ensure that they review the impact of IT initiatives on other projects of the organization and vice versa. Moreover, another key consideration is to study the impact of IT projects on the human assets of the organization in terms of working hours, training requirements, or adaptation to new technologies. Overall, IT leaders must lay due importance to the Information Technology budgeting exercise as a tool to take the organization on the road to success and obtain a competitive edge over its peers.

Retail businesses can keep all the above factors in mind while buying point of sale software for their business.

More About the Author

Ari, the premium retail management software, is a Web Masters’ Product. The company has earned recognition and reputation as an industry leader in the IT sector.

Total Views: 31Word Count: 857See All articles From Author

Add Comment

Technology, Gadget and Science Articles

1. These Are The Best Power Banks You Can Buy Right Now
Author: Jack thomson

2. What Is The Average Lifespan Of A Solar Panel?
Author: Brown Ross

3. Drones Have Entered Our Field Of Vision In A More Cool, Fun And Exciting Way -- Fpv Drone Racing
Author: ada red

4. Benefits You Will Enjoy After Installing Pos System
Author: Sukriti Sinha

5. What Is The Similarity Between Device Care And Health Care?
Author: Charlie Wollstonecraft

6. How Can You Organize And Find People Or Faces In The Photos App On Iphone And Ipad
Author: elina john

7. How Can You Customize The Microsoft Office Ribbon
Author: elina john

8. How Can You Send Imessages On Iphone And Ipad
Author: Jack thomson

9. Cloud Computing- What Is It And How A Business Can Avail It
Author: Lisa Brown

10. How To Create A Simple React Native Chat App With Firebase?
Author: Ash Rakars

11. Here’s How To Convert Slow-motion Video To Normal Video On Iphone And Android
Author: elina john

12. First Cryptographic Companion Device Brings Pre-programmed Security To The Automotive Market
Author: Puspanjali

13. A Guide To Automatically Move Blocked Emails To Trash In Apple Mail In Ios
Author: elina john

14. Benefits Of Erp Implementation For Your Retail Business
Author: Alex Forsyth

15. Benefits Of Investing In Laravel Development For Your Business
Author: Johan Smith

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: